The index is trading above its 20, 50, 100-Days exponential moving averages (EMA) on a daily interval which is positive for Indian bourses
The Indian benchmark index began the post-Diwali week on a strong note as the Nifty surpassed its horizontal trend line resistance placed at 11,700 level convincingly.
As mentioned last week, a break above 11,700 will open the gate for the index to hit 12,000 in the coming sessions and will also be the next resistance.
On October 29, strong buying was witnessed in the index, which forced bulls to overtake bears and close above the 11,800 mark.
Due to the recent breakout in Nifty, its key technical indicators once again turned in favour of bulls. Hence, our bullish view will remain intact. But a near-term consolidation cannot be ruled out before hitting a fresh high.
The index is trading above its 20, 50, 100-Days exponential moving averages (EMA) on the daily interval, which is positive for Indian bourses.
In case of any decline, the index will continue to find support around 11,700 -11,650 levels, which coincides with the horizontal trendline supports and will act as a line of polarity (resistance will act as support).However, a stable move above 11,900 levels will invalidate prior bearish trend reversal formation and will strengthen the index to a fresh high.
Here is a list of top three stocks that could return 5-7 percent in the next three-to-four weeks:
HPCL: Buy| LTP: Rs.318 | Target Rs 340| Stop Loss: Rs 305| Upside 7%
Since Oct 2018, HPCL is trading in a higher high higher low formation which suggests a bullish stance in the counter. Prices have shown a strong rebound near 20-Day exponential moving average on the daily interval.
A recent spurt in prices was supported with above average volumes on the daily chart, which adds more confirmation for a valid breakout.
Prices have formed a V-shaped reversal pattern on the weekly chart. The majority of technical indicators and oscillators are suggesting positive revival in the current momentum.
Traders can accumulate the stock on dips in the range of Rs 317 - 319 for the target of Rs 340 with a stop loss below 305 on a daily closing basis.
Bosch Ltd: Buy| Range Rs 15,200 – 15,000| LTP: Rs 15,591 | Target: Rs 16,570 | Stop Loss: Rs 14,450| Upside 6%
After a prolong correction Bosch has witnessed a Double Bottom breakout on the weekly timeline. Lower high lower low patterns stand invalidates at the current stage as stock witnessed a fresh swing high above its previous high which was placed at around 15000 levels.
The stock has formed a Bullish Butterfly harmonic pattern on the weekly chart and currently, prices are sustaining above its PRZ (potential reversal zone) level.
Momentum oscillator RSI (14) has rebounded from the oversold zone (20) and currently reading above 40 levels with positive crossover.Traders can accumulate the stock on dips in the range of Rs 15,200 – 15,000 for the target of 16570, and a stop loss can be placed below Rs 14,450 on the daily closing basis.
IGL: Buy| Range 378 – 375| LTP: Rs.383| Target: Rs 404 | Stop Loss: Rs 360| Upside 5%
A recent up move created optimism in the prices, which has pushed the IGL above its trendline resistance. On the weekly interval, prices have witnessed a breakout from the “Cup & Handle Pattern” which was placed at Rs 360 levels.
A spurt in prices has made the stock settle above its 50 & 100-Days exponential moving averages (EMA) on the weekly time frame, which is a positive sign for the stock.
Indicators and oscillators are looking promising as a majority of them are trending higher with positive crossover on the cards. Traders can accumulate the stock in the range of Rs 378 - 375 for the target of Rs 404, and a stop loss can be placed below Rs 360.(The author is Technical Research Analyst, Bonanza Portfolio Ltd)
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