Ashish Chaturmohta
The Nifty closed in positive for the fourth consecutive session at 11,713 on April 2. The broader market indices underperformed the benchmark with BSE Midcap and Smallcap down 0.04 percent and 0.18 percent, respectively.
The Nifty has formed Doji candlestick pattern for the last two trading sessions indicating indecisiveness among the bulls as well as bears.
But, the important point is that it is consolidating the gains in a range of hundred odd points and is just shy of its all-time high of 11,760.
Thus, the bias remains positive and April 1 gap low of 11,630 becomes the near-term support for the market. Below this, the next support is seen at 11,550.
If the index crosses and sustains above 11,760 on the tradable basis, we expect the rally to continue towards 11,900-12,000.
In Nifty options, maximum open interest for Puts is seen at strike price 11,000 followed by 11,500; while for Calls it is seen at strike price 12,000 followed by 11,800.
The market has support at 11,550-11,500, while on the upside 12,000 will act as resistance. India VIX closed at 18.08 up by 0.44 percent for the day.
Volatility needs to settle at the current level or decrease for a rally to continue, otherwise, rapid increase is likely to stall current market rally.
Here is a list of top 5 stocks which could give 12-17 percent returns in next 1 month:
State Bank of India: Buy| LTP: Rs 329| Stop loss: Rs 312| Target: Rs 380| Upside: 15 percent
For the last 14 months, the stock has consolidated in a range of Rs 330 and Rs 235 and is currently trading near the breakout zone.
During this phase, the stock has been forming higher lows on the weekly charts indicating buying coming at higher levels.
Looking at the broader long-term monthly chart, the stock has seen major multiyear consolidation between Rs 350 and Rs 150 for the last nine years.
On the daily and weekly charts, price has given a breakout on the upside from Bollinger Band indicating a continuation of the trend in the direction of the breakout.
MACD line has given a positive crossover with its average and moving above the neutral level of zero on the weekly chart. Thus, the stock can be bought at current levels and on dips to Rs 324 with a stop loss below Rs 315 and a target of Rs 370.
Asian Paints: Buy| LTP: Rs 1,519| Stop loss: 1,450| Target: Rs 1,700| Upside: 12 percent
The stock has been trending higher in a rising channel since December 2016 on the weekly chart. Last week, the stock crossed its previous all-time high of Rs 1,490 and seeing follow through action this week.
Price has given a breakout on the upside from the Bollinger Band with the expansion of bands indicating a continuation of the trend in the direction of breakout on the weekly charts.
Volumes have been above average in the last six months indicating buying participation in the stock. The MACD line has given a positive crossover with its average on the weekly chart.
Thus, the stock can be bought at current levels and on dips towards Rs 1,495 with a stop loss below Rs 1,450 and a target of Rs 1,700.
Larsen & Toubro: Buy| LTP: Rs 1,410| Stop loss: Rs 1,350| Target: Rs 1,600| Upside: 13 percent
The stock has formed a W-shaped pattern on the weekly chart between Rs 1,460 and Rs 1,180. Looking at the broader monthly chart, the price has consolidated between Rs 1,470 and Rs 1,180 for the last 15 months.
Volumes have been high in the last ten weeks indicating buying participation in the stock. After the run-up from Rs 1,200, the stock had been consolidating for last three weeks between Rs 1,410-1,350; and now showing breakout on the upside.
MACD line has given a positive crossover with its average and moved above the neutral level of zero on the weekly chart.
Thus, the stock can be bought at current levels and on dips to Rs 1,390 stop loss below Rs 1,350 for a target of Rs 1,600.
Navin Fluorine International: Buy| LTP: Rs 751| Stop loss: Rs 720| Target: 840-860| Upside: 14 percent
The stock has been consolidating between Rs 780 and Rs 580 for the last ten months. It has formed a triple bottom pattern on weekly chart.
The last leg of the up move from the lower end of the range has been on strong momentum and the price had been consolidating for last two weeks in a narrow range to form bullish continuation pole and flag pattern.
On April 2, the stock has given a breakout with momentum and volumes on upside indicating a continuation of the rally. MACD line has moved above the neutral level of zero on the weekly chart.
Thus, the stock can be bought at current levels and on dips towards Rs 740 with a stop loss below Rs 720 and a target of Rs 840-860.
Indian Hotels Company: Buy| LTP: Rs 158| Stop loss: Rs 150| Target: Rs 185| Upside: 17 percent
The stock has seen a major consolidation between Rs 161 and Rs 120 for the last 15 months. It has formed a rounding bottoming-out pattern over the last four-month period; suggesting the stock is likely to see a breakout above its previous all-time high of Rs 161.
Volumes have been high with positive price action indicating buying participation in the last four weeks. Price has given a breakout on the upside from Bollinger Band indicating a continuation of the trend in the direction of breakout on the weekly chart.
The Average Directional Index line indicator of trend strength has moved above the equilibrium level of 20 on the weekly chart.
MACD line has given positive crossover with its average above neutral level of zero on daily as well on the weekly chart. Thus, the stock can be bought at current levels and on dips to Rs 154 with a stop loss below Rs 150 for a target of Rs 185.
The author is Head of Technical and Derivatives at Sanctum Wealth Management.
Disclaimer: The views and investment tips expressed by investment expert on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!