Important for Nifty to hold above 10410; 4 stocks which could give up to 10% return

Among sectoral indices, momentum was seen in energy and IT stocks. Also, both the midcap & smallcap index outperformed the benchmark Nifty.

Three-consecutive higher-top patterns, yet failing to sustain at the top clearly shows that Nifty is currently grappling with multiple gann supply points.

A 270-degree move from the recent low of 10,094 is marked around 10,390 and four-digit Gann number is placed at 1041(0). It is essential for the index to surpass the 10,390-10,410 zone to build on the upside.

Here is a list of top four trading ideas which could give up to 10% return in the short term:

LIC Housing Finance: BUY| Target Rs 660| Stop Loss Rs 580| Return 10%

After six months of decline, the stock appears to have found some solace. It took support around its rising trendline on the weekly chart, drawn from February 2016.

The stock also completed a 720-degree move on the downside placed around Rs 585 from the peak of Rs 794. After marking a low of Rs 574, the selling pressure came to an end as the stock attempted consolidation at the bottom.

In the process, it also regained control above the midpoint of recent gann channel. Moreover, support of 120-EMA is also seen around Rs563.

So, a reversal from multiple support zone suggests that the stock is likely to begin a new up move. Based on above observations, we recommend a buy on LIC Housing Finance above Rs603 with a stop loss of Rs580 for a target of Rs660.

Hindalco Industries: SELL| Target Rs241| Stop Loss Rs264| Return 5%

The Nifty Metal index has struggled to replicate the momentum of 2017 in the month of November. So far, the index has lost 3 percent.

Most of the constituents from the metal space are also showing signs of losing momentum. Hindalco in the month of October had made a peak of Rs278. Patterns of multiple tops and failure to conquer ground above three-digit gann number led to a reversal.

In the previous week’s trade, it attempted a brief recovery but it failed to sustain. Point of polarity zone is placed around Rs257 i.e. the midpoint of the current gann channel.

Confirmation of a break below the same would result in a fresh downside. So short Hindalco Nov Futs below Rs257 with a stop loss of Rs264 for a target of Rs241.

TVS Motor: BUY| Target Rs778| Stop Loss Rs715| Return 6%

It is currently going through a phase of consolidation at the top of its rally. It is showing the characteristic of a stock which is in a strong uptrend.

It is moving higher along with the support of its 5-Weekly EMA since August 2017, wherein every pullback towards this critical moving average has resulted in buying opportunity.

Since last four weeks, the stock went through sideways consolidation at the top of its trend, which ultimately resulted in a bullish move in this week’s trade.

Moreover, it has registered a shift in the orbit on the upside. Based on above parameters, we recommend a buy on TVS Motors above Rs734 with a stop loss below Rs715 and a target of Rs778.

Engineers India : BUY| Target Rs202| Stop Loss 171| Return 10%

A classic pattern of the higher top and higher bottom chart formation on the long-term price chart has ensured a secular uptrend for the stock.

However, from May 2010 to September 2013, the stock was in a downtrend; correcting 78.6% of its entire up move from all-time low to record high. Thereafter, it formed base between Rs70-60 levels and recovered swiftly to keep overall price structure healthy.

Long-term descending trend line break followed by last month’s range breakout confirms that the stock is firmly in a bullish grip, and suggests uptrend resumption.

Recent throwback from Rs204 to the support zone of Rs180-175 provides favorable risk-reward setup to bulls as the stock is expected to retest its recent peak of Rs204.

Based on above rationale, we recommend a buy on Engineers India above Rs182 with a stop loss of Rs171 for a target of Rs202.

Disclaimer: The author is Head of Technical Research at IIFL Private Wealth. 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.