Ashish Chaturmohta Sanctum Wealth Management
New financial year has started on positive note for equity markets. The Nifty began the day on cautious note but gained momentum as the session progressed to finally close at 10,212 levels up by 0.97 percent for the day. Broader markets bettered the benchmark indinces with BSE MidCap and SmallCap indices gaining 1.4 percent and 2.35 percent respectively. Advance/Decline ratio on NSE was almost 5:1.
Yesterday’s rally has managed to close above the 200-day moving average. But it continues to trade below past couple high of 10,227 level which is acting as resistance for the market. Also, index has been unable to sustain above the short term 21-day exponential moving average since the decline started. Trend line connecting highs from 10,631 and 10,478 comes around 10,250 levels.
On positive side, index has formed bullish inverted head and shoulders reversal pattern on intraday time frame and trading at neckline level. Thus, index has near term resistance zone at 10,230-10,250 levels which needs to be crossed on sustainable basis.
Above 10,250 levels, the index can rally towards 10,420-10,500 levels where next cluster of resistances are seen. On the downside index has immediate resistance at 10,095 levels, breaking below this next support is at 9,950-9,920 levels.
Here are the top 5 stocks which can give up to 14 % return:
HDFC Bank Limited | Rating: Buy | CMP: Rs 1931 | Target: Rs 2100, stop loss: Rs 1860 | Return: 9%
The stock is in long term uptrend forming higher top higher bottom formation. It recently touched high of 2015 in the month February and then corrected down to Rs 1830 odd levels. Since then price has been trading in sideways range for last couple of months and witnessed consolidation in a range of Rs 1920 and Rs 1830 odd levels.
Yesterday, the stock witnessed strong price momentum with long bullish candlestick formation and gave breakout from this trading range. The price has also given breakout from Bollinger bands with expansion of bands suggesting trend likely to continue in direction of breakout. MACD has moved above neutral level of zero suggesting change of trend from sideways to up. Thus, stock can be bought at current level and on dips to Rs 1910 with stop loss below Rs 1860 for target of Rs 2100 levels.
Network18 Media & Investments Limited | Rating: Buy | CMP: Rs 62 | Target: Rs 71, stop loss: Rs 58 | Return: 14%
The stock touched high of Rs 64 in the month January and then declined down to Rs 47 odd levels. Then it witnessed consolidation between Rs 53-47 odd levels and has seen strong bounce back to Rs 62 levels. Volumes on decline were below average and on the recent rally from Rs 47 levels, it has been on high volumes, indicating market participants holding on to the stock on declines and fresh buying interest coming in on rallies.
Weekly MACD has given positive crossover with its average. Thus, stock can be bought at current level and on dips to Rs 60 with stop loss below Rs 58 for target of Rs 71.
Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd
Thomas Cook (India) Limited | Rating: Buy | CMP: Rs 287 | Target: Rs 320, stop loss: Rs 274 | Return: 11%
On the long-term charts, the stock has formed rounding base between Rs 170 and Rs 255 odd levels over last 30 months. After giving breakout this month, it hit all time high of Rs 292 levels and then corrected down to Rs 261 levels. The price retraced 38.2 percent Fibonacci level of the rally from Rs 217 to Rs 292 levels and then has swiftly rallied back to its highs in past one week.
The weekly ADX line indicator of trend strength has moved above neutral level of 20 suggesting current rally is likely to sustain. Thus, the stock can be bought at current level and on dips to Rs 283 with stop loss below Rs 274 for target of Rs 320.
Hindustan Unilever Limited | Rating: Buy | CMP: Rs 1351 | Target: Rs 1500, stop loss: Rs 1300 | Return: 11%
The stock is in long term uptrend forming higher top higher bottom formation. After touching high of Rs 1410, it corrected down to Rs 1280 odd levels; where it has found support around previous highs. The stock has seen good bounce back and showing signs of start of fresh up trend. Price has given breakout from Bollinger bands with expansion of bands suggesting trend likely to continue in direction of breakout.
Weekly Relative Strength Index has given positive crossover with its average suggesting correction is over and stock is resuming its uptrend. Price has crossed and closed above 20 and 50 day moving average which were acting as support during the rally and resistance for the stock on recent decline. Thus, it can be bought at current level and on dips to Rs 1330 with stop loss below Rs 1300 for target of Rs 1500.
SRF Limited | Rating: Buy | CMP: Rs 1988 | Target: Rs 2150, stop loss: Rs 1930 | Return: 8%
The stock has seen consolidation between Rs 2000 and Rs 1400 odd levels over past 18 months. In the month of January, the stock witnessed breakout from the pattern, then again retraced back into the congestion zone. It took support at 200-day moving average and has again seen bounce back close to its all-time highs.
Weekly MACD line has given positive crossover with its average above neutral level of zero suggesting stock is likely to see higher levels. Thus, the stock can be bought at current level and on dips to Rs 1960 with stop loss below Rs 1930 for target of Rs 2150.
Disclaimer: The author is Head Technical and Derivatives, Sanctum Wealth Management. 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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