Abhishek Mondal
On Tuesday, the Nifty ended on a subtle note after trading largely volatile for the day. After opening higher, the markets traded flat for most part of the day and finally managed to close above its five day exponential moving average (EMA) (10,691) at 10,717.80, up 0.02 percent.
The relative strength index (RSI) on the daily chart is placed at 63.71, which is showing signs of an upward momentum. The moving average convergence divergence (MACD) is also trading above the zero line with a positive crossover, indicating that the bias could remain bullish for the next few trading sessions.
India VIX closed up 2.14 percent at 14.05. An advance in VIX suggests mild (intraday) volatility will remain in upcoming trading sessions.
The Nifty is expected to face immediate resistance at around 10,760 and 10,790 levels and is likely to find support around 10,640 and 10,600 levels. Moreover, if the index manages to breach 10,790 levels on the closing basis, then a further rally towards 10,950 is possible.
On the options front, maximum Call open interest of 57.43 lakh contracts was seen at strike price 11,000, followed by 10,800, which now holds 35.77 lakh contracts. Maximum Put open interest of 57.28 lakh contracts was seen at strike price 10,500, followed by 10,600 which now holds 41.26 lakh contracts. As per the options data, immediate support is placed around 10,600 levels, whereas 10,800 will act as a hurdle in May expiry.
These four stock ideas could offer up to 11% return in the short-term:
The Federal Bank Ltd: Buy| Close: Rs 103.45 | Target: Rs 115.50 | Stop loss: Rs 96 | Return: 11.65%
The stock has given a consolidation breakout above Rs 101-102 levels on Tuesday with moderate volumes. Daily indicators such as Relative strength index (RSI) and MACD are in buying mode whereas (+) DI trading above (-) DI, which indicates strong buying interest after the breakout.
We expect the stock to extend this rally towards our mid to long-term target of Rs 115.50 with a stop loss below Rs 96 on a closing basis.
DCB Bank Ltd: Buy| Close: Rs 198.75 | Target: Rs 212 | Stop loss: Rs 190 | Return: 6%
On the daily chart, the stock has given a breakout from the bullish flag pattern with higher volumes and the short-term moving averages are trading above its long-term moving averages which indicate a bullish trend.
The Daily Relative Strength Index (RSI) is showing an upward momentum and (+) DI continuously trading above (-) DI, Therefore, we recommend to buy for the upside target of Rs 212 and keep a stop loss below Rs 190 (closing basis).
Crompton Greaves Consumer Electricals Ltd: BUY | Close: 250 | Target: Rs 275| Stop loss: Rs 234 | Return: 10%
After making a long consolidation, the stock has given a breakout above Rs 245-246 levels on Monday with higher volumes. The Daily Relative strength index (RSI) is showing upward momentum and MACD is trading above zero with positive crossover whereas (+) DI just cross above (-) DI.
On Balance Volume or OBV is showing an upward momentum, which indicates that the stock has the potential to move higher. A trader can buy the stock around current levels and add on dips around Rs 244-246 with a stop loss below Rs 234 (closing) for a target of Rs 275.
Vedanta Ltd: Sell around Rs 288-290| Close: Rs 282.90| Target: Rs 273| Stop loss: Rs 299 | Return 5.21%
The stock has been struggling around the resistance zone of multiple moving averages with moderate volumes on the daily charts.
The daily Relative strength index (RSI) is showing downward momentum and MACD is trading below the signal line below zero level, which indicates a bearish trend.
A trader can sell the stock after some technical bounce back around Rs 288-290 with a stop loss above Rs 299 (closing basis) for a target of Rs 273.
Disclaimer: The author is Research Analyst, Guiness Securities. 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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