Ashish Chaturmohta
The bulls finally took charge of D-Street on October 9 after six consecutive days of battering. The Nifty closed higher by 1.68 percent at 11,313 levels.
The broader market indices underperformed the benchmark, with the BSE Midcap and Smallcap recording gains of 1.38 percent and 1.66 percent, respectively.
The market breadth on the NSE was slightly in favour advances with an 11:10 ratio. For the day, the Nifty formed a bullish body candle closing at the highs.
The index took support around its previous consolidation highs in the 11,150-11,100 region and then bounced back. It also managed to close above its 200-day moving average.
If the index sustains above 11,400, then the market could rally towards 11,600-11,650 zone. On the downside, 11,100-11,060 is the critical support zone for the market now.
A break below 11,060 will add fresh selling pressure. In the Nifty October monthly expiry options, maximum open interest for Put is seen at strike price 11,000 followed by 11,200; while for Call maximum open interest is seen at 11,500 followed by 12,000.
A list of top five stocks which could give 10-14 percent return in the next one to three months:
Voltas Ltd: Buy| LTP: Rs 681| Stop Loss: Rs 650| Target: Rs 775| Upside 13 percent
The stock hit an all-time high of Rs 675 in December 2017 and then went into negative to a sideways correction to touch a low of Rs 519 in October 2018.
For the last two years, the stock has witnessed a consolidation between 675 and 519 levels to form a rounding bottom pattern on the weekly chart.
In September, the stock hit an all-time high of Rs 705 and has since been consolidating around the breakout level of Rs 675.
The stock is showing signs of resumption of an uptrend after short-term consolidation. Price has taken support at its 21-day exponential moving average (EMA), which has been acting as support on dips.
The Relative Strength Index (RSI) and Stochastic have also given a positive crossover with their respective averages on the daily chart. Thus, the stock can be bought at current levels and on dips towards Rs 672, with a stop loss below Rs 650 and a target of Rs 775.
Muthoot Finance Ltd: Buy| LTP: Rs 686| Stop Loss: Rs 658| Target: Rs 780| Upside 13 percent
The stock has been consolidation between 655 and 555 levels over the last four months. In September, it witnessed a sharp rally from the lower end of the range after taking support at its 200-day moving average to touch an all-time high of Rs 699.
It has formed a bullish continuation pole and flag pattern on the daily chart. The stock is showing signs of resumption, with bullish body candle on the daily chart.
The RSI and Stochastic have given positive crossover with their respective averages on the daily chart. Thus, the stock can be bought at current levels and on dips to Rs 675 with a stop loss below Rs 655, and a target of Rs 780 levels.
PI Industries Ltd: Buy| LTP: Rs 1,308| Stop Loss: Rs 1,250| Target: Rs 1,450| Upside 11 percent
The stock is in an uptrend, forming higher tops and higher bottom on the weekly chart for the last year. It formed a short-term rounding base pattern between 1,220-1,040 levels and witnessed a breakout in early September.
For the last one month, the stock has been trading in a range above the breakout level of Rs 1,220. The price has taken support at its 21-day exponential moving average and managed to hold above it for the last one week. Stochastic has given positive crossover with its averages on the daily chart.
The Average Directional Index (ADX) line, an indicator of trend strength, has turned up from the equilibrium level of 20 with rising Plus Directional line on the weekly chart.
Thus, the stock can be bought at current levels and on dips to Rs 1,290 with a stop loss below Rs 1,250, and a target of Rs 1,450 levels.
Asian Paints Ltd: Buy| LTP: Rs 1,773| Stop Loss: Rs 1,710| Target: Rs 1,960| Upside 10 percent
The stock is in an uptrend, forming higher tops and higher bottoms on the weekly chart. After a sharp rally, the stock has been consolidating for the last couple of weeks.
It has formed a bullish continuation pole and flag pattern on the daily chart. Also, the stock has formed a bullish body on the daily candle, with above average volumes suggesting a resumption of the uptrend.
The RSI and Stochastic have given positive crossover with their respective averages on the daily chart. The ADX line has moved above the equilibrium level of 20 with rising Plus Directional line on the weekly chart.
Thus, the stock can be bought at current levels and on dips towards Rs 1,750, with a stop loss below Rs 1,710, and a target of Rs 1,960 levels.
Tata Global Beverages: Buy| LTP: Rs 270| Stop Loss: Rs 258| Target: Rs 310| Upside 14 percent
The stock is on an uptrend, forming higher tops and higher bottoms on the daily chart since its February low of Rs 177. The stock has been witnessing high volumes on the up move and declines on below-average volumes, indicating that market participants were continuing to hold their long positions.
For the last four months, the stock has witnessed a consolidation between 245 and 280 odd levels with a slightly positive bias. Thus, forming a base for the next leg of the up move.
Stochastic has given positive crossover with its averages on the daily chart. Thus, stock can be bought at current levels and on dips to Rs 265, with a stop loss below Rs 258, and a target of Rs 310 levels.
(The author is Head of Technical and Derivatives, Sanctum Wealth Management)
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