For the week, volatility is likely to remain subdued and hence traders are advised to remain stock specific. The bias as mentioned above remains positive.
The Indian market turned volatile in December, thanks to some weak global cues, the outcome of state elections, as well as the surprise resignation of RBI governor Urjit Patel, which kept things on edge for equity investors.
But, thankfully, bulls managed to grab the upper hand and pushed the Nifty back above 10,800 levels on a closing basis for the week ended December 14. The volatility, which was concerning for traders, has cooled off from highs which suggest bulls should remain in charge despite occasional profit booking, suggest experts.
What really stood out in the week gone by were the broader indices. The BSE Midcap index rose 3.2 percent while the S&P BSE Small-cap index closed 2.8 percent higher.
The Nifty registered an intra-week low of 10,330, very close to the 61.8 percent retracement level (10,004-10,941) and a strong bounce back from the technical level has resulted in a formation of a higher bottom on the daily chart.
The said bounce back was supported with broad-based buying which created strong optimism to break the resistance of 200-days moving average (DMA) and 89-EMA placed at 10,750 with ease.
India VIX fell down by 3.21 percent at 15.05 levels on Friday. It has seen a sharp cut of about 28 percent in the last four sessions which suggests that bulls are now getting a grip on the market with the expectation of limited downside.
“Tracking the momentum, we sense that the price is likely to break the resistance of 10,830-10,850 sooner than later, which may even extend the rally towards 11000-11080 levels,” Pushkaraj Sham Kanitkar, AVP - Technical Research at GEPL Capital told Moneycontrol.
“This in a way means that we are placed in the corridor/range of compression and may lead to a sideways tranche as put up by the depreciation of the India VIX as well,” he said.
Kanitkar further added that for the coming week, volatility is likely to remain subdued and hence traders are advised to remain stock specific. The bias as mentioned above remains positive.
Here is a list of top 10 short-term trading ideas by experts which could give 6-15% return in the next 1 month:
Analyst: Aditya Agarwal, Head of Technical Research, Way2Wealth Brokers Pvt. Ltd.
Dabur: Buy around 435-430 | Target: Rs 480 | Stop Loss: Rs 410 | Return 8.6 percent
After a high of 500, Dabur saw sharp correction and on the lower side, it tested 360 levels in the month of November. On the daily/weekly charts, the stock had a strong support around the Rs 360 zone.
It respected the support placed at Rs 360 levels and has seen a good pullback from there in the last few weeks. On the daily chart, inverse head and shoulder pattern is quite visible on the counter and it gave a breakout from the said pattern above Rs 430 levels.
In the short-term perspective, the outlook for Dabur remains bullish and any dip towards Rs 435-430 can be utilized to initiate long positions with a target of Rs 480 and a stop loss placed below Rs 410.
Indian Bank: Buy around 240 | Target: Rs 265 | Stop Loss: Rs 228 | Return 10 percent
The counter is moving in line with all the other PSU Banking stocks. Indian Bank saw a correction from higher levels and in that process made a low of Rs 210 levels. Since the last 3 months, the stock is consolidating in a broad range of 210-265 levels.
On the larger degree framework, 200-210 zone is a strong support for the stock. It retested its low of Rs 210 just last week, and witnessed a sharp pullback from there and managed to close above its short-term resistance of 230 levels.
On the back of short covering, we expect Indian Bank to see a further upside from the current levels and can test the upper side of the range. Therefore, traders can buy the stocks around 240 levels with a target of 265 and a stop loss placed below 228.
Ashok Leyland: Sell around 104-105 | Target: Rs 96/92 | Stop Loss: Rs 109 | Return 11 percent
Ashok Leyland is in a corrective mode since September and is making lower highs and lower lows on the daily chart. On the larger degree charts, the stock has given a breakdown below its crucial support zone of 107 and for the last 2 weeks it is trading below that.
In the futures segment, the stock is witnessing a short formation at higher levels and any pullback in the counter is being used to initiate fresh shorts.
Our short-term outlook on the counter remains weak and we recommend selling Ashok Leyland around 104-105 with a price target of 96/92 and a stop loss placed above 109.
Analyst: Dinesh Rohira, Founder & CEO, 5nance.com
Jet Airways Ltd: Sell | LTP: Rs 259 | Target: Rs 244 | Stop-loss: Rs 276 | Downside: 6 percent
Jet Airways continued to trade under negative trajectory over past one-month after making a healthy rebound from its September fall. However, it failed to sustain momentum, consolidating around the high of 366 towards a low of around the 251 level, at which it is at currently.
It remained under the selling regime this week despite positive market trend, and further slipped below its 200-day moving average, currently placed at 362 odd levels indicating a sustained pressure. It formed a bearish candlestick pattern on its weekly price chart with a small body.
The momentum indicator continued to outline weak trend with its weekly RSI at 40 level which signals downward divergence in price coupled with MACD trading below its Signal-Line on the weekly chart. We have a sell recommendation for Jet Airways which is currently trading at Rs. 251.9.
Analyst: Sameet Chavan, Chief Analyst - Technical & Derivatives at Angel Broking Ltd
Petronet LNG: Buy | LTP: Rs 217.30 | Target: Rs 230 | Stop Loss: Rs 212 | Return 6 percent
Since the last three months, this stock has been oscillating within the boundaries of a ‘Triangle’ pattern. With Friday’s strong move, the stock finally managed to confirm the breakout from the same along with higher than average daily volumes.
In addition, the RSI-smoothened oscillator is showing a positive crossover, indicating this move to extend in days to come. Thus, we recommend buying for a positional target of Rs.230 in the coming days. The stop loss can be placed at Rs 212.
Raymond Ltd: Buy | LTP: Rs. 849.65 | Target: Rs 934 | Stop Loss: Rs 828 | Return 12 percent
In mid-October, this high beta mid-cap counter formed its base around the 200-SMA on the weekly chart. Since then, we have been maintaining our positive stance on the counter.
Recently, we saw prices struggling around 825, which eventually became the multiple resistance zone. On Thursday, there was a massive bump seen at the opening well above this hurdle and thereby, confirmed a breakout with a ‘Breakaway Gap’.
As per the gap theory, this development is considered as a strong bullish sign and hence, Friday’s profit-taking should be interpreted as a good buying opportunity for the target of Rs 934 in the coming days. The stop loss can be placed at Rs 828.
Voltas India Ltd: Buy | LTP: Rs 578.75 | Target: Rs 630 | Stop Loss: Rs 561 | Return 9 percent
Of late, we did witness muted moves in this traders’ favorite counter. However, in the last four days, the stock seems to have attracted some buying interest.
On Friday, we saw prices traversing the ‘200-SMA’ placed around 569 with some authority. This also confirms a breakout from the trend line resistance.
Looking at the weekly chart, we expect this ‘Tata Group’ company to outperform in the near-term. We advise going long for an immediate target of Rs 630 and for this strategy, with the exit placed below Rs 561.
Analyst: SMC Global Securities Ltd
Bajaj Auto Ltd: Buy | LTP: Rs 2,823 | Target: Rs 3050 | Stop Loss: Rs 2,690 | Return 8 percent
The stock closed at Rs 2823.15 on December 14, 2018. It registered a 52-week low at Rs 2420 on 25th October 2018 and a 52-week high of Rs 3468.35 on February 2, 2018.
The 200-days Double Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 2787.73. After registering a 52-week low of 2420, the stock has witnessed a sharp upside while trading.
The stock registered higher highs and higher lows sort of in a “Rising Wedge” pattern on the weekly charts and has given a breakout above the same.
Thus, further buying can be anticipated from the current level. Therefore, one can buy in the range of 2,790-2,800 levels for the upside target of 3,000-3,050 levels, and a stop loss below 2690.
ICICI Bank Ltd: Buy | LTP: Rs 351.90 | Target: Rs 375 | Stop Loss: Rs 325 | Return 7 percent
The stock closed at Rs 351.90 on December 14, 2018. It registered a 52-week low at Rs 256.50 on July 16, 2018 and a 52-week high of Rs. 375.30 on November 16, 2018.
The 200-days Double Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 318.48. The short-term, medium term and long term bias are looking positive for the stock.
It formed an “Inverted Head and Shoulder” pattern on the weekly charts and has given a breakout of the same in early November, The stock has been continuously trading above breakout levels since then.
Currently, it is comfortably trading above 200-DEMA on the daily charts, which gives a positive outlook for the near-term. Therefore, one can buy in the range of 343-346 levels for the upside target of 370-375 levels and a stop loss below Rs 325.
Analyst: Shabbir Kayyumi, Head - Technical & Derivative Research, Narnolia Financial Advisors Ltd.
PFC: Buy Around: Rs 90 | LTP: Rs 90.45 | Target: Rs 104 | Stop Loss: Rs 83 | Upside 15 percent
The stock has corrected from the peak of 108 and currently, it has shown signs of bottoming out around 83 levels. Formation of the double bottom pattern on the hourly chart shows that the momentum is on the upside.
The stock formed a long bullish candle near the point of polarity on the weekly chart. There is a possibility of a bounce back further on the upside. With decent volume participation witnessed, we recommend a Buy on this scrip around 90 for an upside target of 104, and a stop loss of 83.Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.