Mustafa Nadeem
The Nifty50 extends the positive momentum as technical indicators along with external factors favors the underlying momentum. The present momentum is in the favor of bulls after witnessing three weeks of continuous positive rally.
Firstly, the Index and the Indian equity markets were largely tracking the global market cues. But, post banking system and the non-performing asset (NPA) news, Indian market lost some momentum.
The rebound in Banknifty on the back of short covering paved the way for bulls. Level of 24,800 - 24,700 acted as a medium-term support the rally north of 25000.
The clouds of trade wars were fading away while the volatility was also down as compared to previous higher levels. The upsurge in Metal Index aided momentum since it carried a higher weight to the overall index.
The second factor that worked well for bulls was the normal monsoon projection by Skymet and IMD which aided sentiments further and took the index to close above 10,500 levels.
The derivatives data suggests writing of 10,400 - 10,300 Put which indicates this level to be short-term support. The recent change in data on the provisional basis indicates minor long liquidation at 10500 though highest writing in call side is seen at 10,600 - 10,700 indicating the maximum upside to this momentum.
We expect the range for Nifty to be between 10,600 to 10,400 levels, but we may consolidate here for a while before going higher. For Bank Nifty, this range is seen at 25,000 - 25,400.
Fundamentally, the earnings season will have greater importance to the overall structure of market since it is expected to be in two digits growth.
The lower guidance by Infosys took a toll on the index while all eyes will be on the TCS in the coming week and its operating margins and guidance for the next financial year. The IndusInd Bank result will set the tone for private banks and how they pan out.
Here is a list of top four stocks which could give up to 14% return:
L&T Finance Holdings Ltd: BUY| Target Rs199| Stop Loss Rs168| Return 14%
The stock has given a fresh breakout from an inverted Head and Shoulder pattern and is now coming out of the long consolidation after a healthy correction since the last 3 month.
We expect this momentum to pick up based on the price action analysis and the stock is likely to trend higher to Rs 199 to Rs 204 in the coming days. Investors can keep a stop loss below Rs 165.
NCC Ltd: BUY | Target: Rs 145 | Stop loss: Rs 125 | Return 8%
The stock formed a pennant on the daily chart which is a continuation pattern and is usually followed by a continuation of an existing trend.
Higher volume with momentum indicators are pointing up and we expect it to test its next crucial level of Rs 145 in the coming days.
InterGlobe Aviation Ltd: BUY | Target: Rs 1615| Stop loss: Rs 1450| Return 8%
The stock is making a flag formation after a recent run-up indicating that it is in the middle of some consolidation. Though the momentum looks positive and the range expansion may continue in the coming week with price extending to higher levels of Rs 1615.
Jet Airways Ltd: BUY | Target: Rs 690| Stop loss: Rs 600 | Return: 7%
The positive momentum in the overall aviation sector is looking strong. Jet Airways is sustaining the support trendlines drawn from troughs of 2017.
Candlestick patterns are indicating a reversal in the short-term which can be seen as a sweet spot to buy for higher targets of Rs 690 and a stop loss at Rs 600.
Disclaimer: The author is CEO, Epic Research. The views and investment tips expressed by investment experts 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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