A fresh trend in Bank Nifty can emerge only beyond 30200 on the higher side and below 29500 on the lower side.
Though Nifty closed on April 26 with a bullish candle with long lower shadow, volatility remained very high owing to the ongoing election. At the end of monthly F&O expiry, index managed to close above monthly pivot point resistance placed at 11,678 which signifies a continuation of the up move.
At the same time, Nifty is trading above its two major simple moving averages 100-DMA and 200-DMA. Nifty’s short-term moving average 20-SMA is placed around 11,655 mark and this moving average has acted as support during selling in the last two weeks.
The candlestick pattern suggests buyers are active on the lower side 11,600-11,580 levels. The indication from candlestick pattern is that the new trading range will be only above previous high 11,860 or below 11,580 levels. Regression line is placed around 11,680 levels and that remains a key midpoint for the near term market range, line of parity is placed around 11,540 marks.
Nifty future rollover data from April expiry is 81 percent which is higher than last month’s rollover data of 66 percent with higher closing in index level indicating long build up in index. Rollover is also more than the last 3 month’s average of 69 percent and 6 month’s average of 68 percent.
Bank Nifty traded in a tight range of 30,000 on the higher side and 29,500 on the lower side the entire last week. However, it could not close above 20-days SMA suggesting more strength is required to trade higher. Moreover, a fresh trend in Bank Nifty can emerge only beyond 30,200 on the higher side and below 29,500 on the lower side.
Here are the top stock trading ideas which can give good returns:
Dr Reddy's Laboratories: Buy around: Rs 2,875 |Target Rs 3,300 | Stop Loss Rs 2,650| Upside 15%
The stock rebounded from a low of Rs 1,870, and started showing pullback on the upside. This bounce-back rally and contraction took the form of inverted Head and Shoulder price pattern from the last few weeks on larger time frame of the chart.
Currently, it is waiting for the breakout on upside where buying momentum is expected to accelerate further. Positive crossover on daily chart suggesting Bulls can take charge. Indicator and oscillator are also showing a favourable scenario in the coming sessions.
So, based on the mentioned technical structure, we expect that price may see a rally on upside till Rs 3,300 mark. Buy around Rs 2,875 with a stop loss of Rs 2,650 for the target of Rs 3,300.
DCM Shriram: Buy around: Rs 405 |Target Rs 455 | Stop Loss Rs 376| Upside 12%
Daily chart of stock reveals that demand is increasing and supply is diminishing. Rising trend line at higher levels is displaying trend continuity and buying opportunity at current juncture. As of now, the sustainability of RSI above 9-DMA indicates surge on the upside. Apart from this, positive crossover in MACD signals optimism, suggest upside move in the counter in coming sessions. We recommend buying DCM Shriram around Rs 405 with a stop loss of Rs 376 for the target of Rs 455.
Prestige Estates Projects: Buy around: Rs 258 |Target Rs 290 | Stop Loss Rs 238| Upside 12%
After hitting the peak of Rs 284, the stock slipped lower levels at Rs 255 and then it turned back after forming congestion zone on the lower time frame of charts. As of now, it is retesting its falling trend line on an hourly chart which is showing stability in the stock.
The declining histogram in MACD along with positive crossover below central line is creating optimism for coming sessions. The key support level is located near Rs 255-260 range where 20 DMA is seen. As long as it sustains above Rs 238, the possibility of moving on the upside is higher and it can hit our target of Rs 290 with ease.
Hero MotoCorp: Buy around Rs 2,600 |Target Rs 2800 | Stop Loss Rs 2,500| Upside 8%
The stock has corrected from the peak of Rs 3,322 and currently it has shown signs of bottoming out around Rs 2,515 levels. Formation of the double bottom on daily chart showing positive moves on the upside. Flat Positive divergence in RSI on the daily chart is showing the possibility of bounce back further on upside. As of now, stock is taking support from line of parity on daily chart.
With decent volume participation witnessed, we recommend a buy in this scrip around Rs 2600 for an upside target of Rs 2,800 levels with stop loss of Rs 2,500 levels.
Aurobindo Pharma: Buy around: Rs 798 |Target: Rs 850 | Stop Loss: Rs 770 Upside 7%
Aurobindo Pharma is moving in a well defined ascending channel with multiple touch point and appears to be having a strong support around Rs 770 levels as it bounced back many of time from the demand line. Formation of inverted H&S indicates upside momentum further. It also maintained its uptrend on the long term chart and is trading well above its short and long term moving averages.
The momentum oscillator, RSI is also favoring the price pattern. One can accumulate the stock around Rs 798 for an upside target of Rs 850 and a stop loss below Rs 770.
(The author is Head - Technical & Derivative Research at Narnolia Financial Advisors Ltd.)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.