Shabbir Kayyumi
Continuing its gaining spree, the benchmark index Nifty50 added 100 points in the last week and scaled a fresh record high of 12,389.
Guppy Multiple Moving Average (GMMA) is continuously giving buy signal and as long as fast averages are above all slow-moving averages, prices will continue to trade higher. MACD buy signal also provides support to the continuation of bullish price movement.
Once Nifty surpasses 12,400 resistance zone, it can march towards 12,500 and subsequently towards 12,600 levels which are near the Fibonacci extension line. Near term, supports are placed near 12,225 where 20 DMA and five-week DMA is placed and any daily close below these levels will lead to weakness in the benchmark index.
Bank Nifty gave a correction last week and closed lower suggesting selling pressure around 32,000 levels. Critical support for Bank Nifty is placed at 30,000 levels.
Here are three stocks which could give more than 10% return in short term:
GAIL (India): Buy | Buy Around: Rs 123 | Target: Rs 138 | Stop Loss: Rs 114 | Upside: 12 percent
The stock has witnessed decent erosion from a peak of Rs 190 to currently bottom out at around Rs 110 levels. The appearance of a Hammer candle near support levels along with bullish crossover infers the immediate floor near Rs 110-114 zone.
As of now, the formation of Inverted Head and Shoulder (H&S) on a shorter time frame suggests a move on the upside. Indicators and oscillators are looking conducive for the price pattern. Looking at all these technical factors, we suggest buying in the scrip around Rs 123 with stop loss below Rs 114 on closing basis for the target of Rs 138 levels.
Tata Motors: Buy | Buy Around: Rs 192 | Target: Rs 217 | Stop Loss: Rs 178 | Upside: 13 percent
Stock price has decisively broken out from its Pole & Flag pattern and currently it is sustaining above the same showing further strength. On the daily and weekly chart, the stock has witnessed a shift of trend to the upward forming base with congestion.
The weekly strength indicator and the momentum indicator, stochastic both are in positive territory which supports upside momentum to continue in the near term. Stock price is sustaining well above 20 & 50 SMA which supports bullish sentiment ahead. We suggest buying Tata Motors around Rs 192 with a stop loss of Rs 178 and target Rs 217.
Ramco Cements: Buy | Buy Around: Rs 800 | Target: Rs 900 | Stop Loss: Rs 750 | Upside: 12.5 percent
The stock was undergoing a Cup & Handle consolidation for the last nine months, and has recently given a breakout. The momentum oscillator RSI is in positive territory and is entering into a trending phase.
It is currently trading at a ten-week high indicating buying interest in the stock. The weekly structure too looks bullish and poised for a strong run. We recommend buying Ramco Cements around Rs 800 with a stop loss of Rs 750 and a target of Rs 900.
(The author is Head of Technical Research at Narnolia Financial Advisors.)
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.
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