Rohit Singre Bonanza Portfolio
The Nifty has registered a fresh high on Wednesday’s session with decent volume, suggesting that the index is on track to touch 9,600 levels in coming sessions.
The broader index is busy in making fresh highs, supported by both technical and derivative hands. Overall, charts structure is looking quite bullish, but on the lower time frame, some oscillator is suggesting overbought condition which could trigger consolidation or some correction.
If we look at the derivative setup, 9500 CE having highest open interest followed by 9600 CE which will be strong resistance for coming sessions and on downside 9300 PE is having highest open interest forming a strong base.
Our overall stance will be on the positive side and we may see index to march towards 9,580-9,600 levels in the near-term. We also recommend to book profit on the higher side and any dip will be a fresh buying opportunity.
Top five technical picks which can give return up to 16 percent in short-term:
Aditya Birla Fashion: BUY | Target: Rs 208 | Stop Loss: Rs 163 | Upside: 15%
The stock was consolidating in the past one year and registered a breakout in mid-April as it gave close above the consolidation area.
Recently, we have seen very good buying interest in the stock at breakout levels suggesting participant is trying to enter at breakout zone. The stock has not moved as of now and we expect it to react on the breakout.
On weekly charts, we have noticed a bullish flag pattern which is considered a continuation pattern. The momentum oscillator such as the relative strength index (RSI) is currently reading near 63 levels which is again considered to be bullish.
Traders can initiate buy call on the counter as we expect the stock to move towards Rs 208 levels in the near-term and keep a stop loss below Rs 163 on a closing basis.
SRF: BUY | Target: Rs 1,970 | Stop Loss: Rs 1,750 | Upside: 8%
The stock was on the radar since it has given a strong breakout in late April with decent volume. If we look at the daily chart, the stock has given a decisive breakout from its bullish flag pattern and prices have moved higher with increasing volume confirming a break.
On the weekly chart, the stock is trading in rising channel pattern and recently it bounced back from lower band of the channel. The momentum indictor, RSI, currently is trading near 65 level which is considered to be a bullish zone.
By considering a technical setup, Bonanza recommends a buy on stock at a current market price or on decline up to Rs1,780 for the targets of Rs1,970 and keep a stop below Rs1,750 on the daily closing basis.
Triveni Turbine: BUY | Target: Rs 161 | Stop Loss: Rs 126 | Upside: 15%
Triveni Turbine gave a decisive breakout from its ‘Cup and Handle’ pattern six weeks before. Volume activity too picked up during the price movement.
The stock has become very active since the breakout and is closing above the same by forming reversal candle pattern, which we believe is a pullback before starting the next leg of the rally.
On the flip side, the stock has a strong resistance near Rs151 level which is at its lifetime high, and breaking above the same will unfold fresh targets for the stock.
Thus, bonanza recommends a buy call on the script at the current price to any decline up to Rs135 levels with targets of Rs161 and keeping a stop loss below Rs126 on a closing basis.
Mahindra Holidays: BUY | Target: Rs 550 | Stop Loss: Rs 420 | Upside: 16%
Mahindra Holidays & Resorts (MHRIL) has registered a ‘Cup and Handle’ breakout on the daily chart around Rs460 levels and we witnessed volume activity also zoomed along with price confirming the breakout.
If we look at border chart, we can see that it has been trading in rounding bottom formation which is again bullish pattern. On the weekly chart, after giving a double bottom breakout, stock changed its downtrend to a short uptrend.
If we look at the current chart, stock rising in uptrend channel by forming a higher high higher low pattern which is considered to be a bullish continuation pattern. Momentum indicator RSI reading near 61 which is again bullish zone.
We expect prices to march towards Rs550 levels in near term so one can initiate a buy position on the counter with keeping stop out below Rs420 levels on closing basis.
Engineers India: BUY | Target: Rs 195 | Stop Loss: Rs 160 | Upside: 13%
After making low at Rs72 levels in March 2016, the stock has resumed its uptrend and we have seen a very good rally in the stock.
If we look at weekly charts, the stock has broken its bullish flag pattern twice and reacted technically. If we consider current chart structure, we can see that one more bullish flag formation is forming on the charts which is about to breakout.
On the broader charts, the stock has also broken above its double bottom formation above Rs162 levels hinting more fresh levels in the near future. Even on longer time frame charts are looking very good as the stock has given a break on the monthly chart as well.
Considering above technical evidence, Bonanza recommends a buy call on the stock at a current price to any decline up to Rs165 levels for the targets of Rs195 and a stop loss below Rs160 on a closing basis.
Disclaimer: The author is Senior Research analyst, Bonanza Portfolio Ltd. The views and investment tips expressed by investment experts on Moneycontrol are their own, and not that of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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