Nifty to consolidate in expiry week; 3 stocks which could give 9-11% return in 1 month

The Nifty withhold the support levels of 10,440 (50 percent Fibonacci retracement of prior up-move from 9,952, to 10,929 levels).

We believe that the markets will see a consolidation in the range of 10,500 to 10,730 levels over the next week. Yes, there could be volatility with respect to rollover movements in individual sectors/stocks and quarterly results.

Q) Plenty of stocks hit fresh 52-week lows this week instead of 52-week high. Do you think these are stocks which are carrying the momentum and investors should ideally book profits or stay away from them?

A) The entire macro scenario is changing especially with respect to higher crude oil prices and weakness of rupee against Greenback.

We are witnessing stocks from energy, automobiles, cement and midcaps space which is hitting fresh lows and the correction is pretty sharp compared to the broader markets.

Defensive sectors like FMCG and IT are scaling fresh 52-week high in the current month. We would rather suggest booking profit albeit partially, in outperforming sectors.

Investors can also look to invest in beaten-down sectors/stocks, as they will converge over the next few months once the crude prices settle down in the near-term.

Q) What is your call on smallcap and midcap stocks? Should investors stay away or just book profits on rallies?

A) Declining by 7.4 percent and 6.9 percent on a month-to-date (MTD) basis, midcap and smallcap indices are trading below their long-term 200-day average, which offers an opportunity for the investors to accumulate high-quality midcap stocks at regular intervals to build a strong diversified medium-term portfolio.

Q) Top 3-5 positional call which could give handsome returns to investors in next 1 month?

A) Here is a list of top three stocks which could give up to 11 percent return in the next 1 month:

Capital First (CMP: 557): Buy | Target: Rs 620 | Stop loss: Rs 535 | Return: 11%

The stock has retraced 61.8 percent of prior upmove (from Rs 346 to Rs 902), where its medium-term moving average worked as the key reversal point. The stock has closed at eight days high and with the sector in focus it is expected to outperform, going forward. The key technical indicators remain bullish mode, which signals strength in the stock.

Kajaria Ceramics (CMP: 549): Buy | Target: Rs 589-610 | Stop loss: Rs 515 | Return: 11%

The stock ended on a positive note after two weeks of consecutive decline, where its long-term rising trend line has supported the reversal. Convergence in RSI rise signals an overall positive trend. In case of any decline, its 200 week average will continue to work as key reversal point.

United Spirits (CMP: 3250): Buy | Target: Rs 3,550 | Stop loss: Rs 3,060 | Return: 9%

The stock reversed after taking the support of prior multiple lows and rose to 10-day closing high. Reversal in key technical indicators from their oversold zone signals a bullish trend reversal. In case of any decline, recent swing low will work as the key reversal point.

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