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The Nifty50 broke past its previous record high of 10,137 on Monday to witness a fresh record high of 10,160 led by gains in Tata Motors, Bajaj Auto, and L&T. The mid & small cap index too witnessed respective record highs in opening trade.
It witnessed an overwhelming momentum during last week trading session as it assertively managed to close above its earlier psychological level placed at 10,050 which was a positive sign.
After consolidating for nearly 3 to 4 weeks, our markets showed some encouraging movement as we saw index marching towards record high of 10137.85.
In fact, a couple of valiant attempts to traverse this hurdle was turned down. Eventually, the Nifty managed to close firmly tad below the 10100 mark on Friday.
“The kind of activity we are observing since last three days is quite obvious as traders seemed a bit unsure whether the market has that much strength to cross record highs or not. Hence, the next round of momentum in the upward direction is possible only after surpassing this hurdle,” Sameet Chavan, Chief Analyst- Technical and Derivatives, Angel Broking told Moneycontrol.
“Until then we are likely to witness similar kind of uncertainty in a range of 10,000 – 10,138 with slightly higher volatility. A sustainable move below the 10,000 mark would apply brakes on the recent optimism,” he said.
At present, one needs to closely keep a track of these important levels on the index and meanwhile, keep focusing on individual stocks in order to obtain better trading opportunities.
Chavan further added that a prudent strategy would be to stay light on positions and should ideally be prepared with a proper exit strategy.
The RSI at 62 indicates a favorable buying regime coupled with continued uptrend momentum depicted by MACD at 52 above its Signal Line. Based on Fibonacci retracement a major support will be seen at 9807 and resistance level will be at 10137.
Here is a list of top 10 stocks which could give up to 10% return in short term:
Analyst: Dinesh Rohira, Founder & CEO, 5nance.com
Rain Industries: BUY| Target Rs. 168 | Stop-loss Rs140 | Return 10%
Rain Industries witnessed a healthy correction this week on the backdrop of lower volume support but rebounded back towards the end of trading session on positive cues indicating an immediate uptrend.
On the weekly chart, it formed a bullish reversal candlestick pattern indicating a near-term uptrend movement after losing marginal points and continued bullish pattern on its long-term chart.
Further the momentum oscillator with RSI at 62 indicating strong support for current buying regime coupled with a continued crossover of MACD from its Signal-Line suggesting a strong support for uptrend momentum.
The stock is currently facing a resistance at 173 and support level at 139. We have a BUY recommendation for Rain Industries which is currently trading at Rs. 152.6
Indiabulls Ventures: BUY| Target Rs304 | Stop-loss Rs. 255 |Return 5%
Indiabulls Venture continued to trade at upper circuit despite losing marginal points during the last trading session. It continued with winning cycle on weekly basis forming a peak on intraday basis at 295-level over volume support but failed to sustain.
On the daily price chart, it formed a strong bullish candlestick pattern with the possibility of a breakout from current level given a positive correction in the last session.
On the technical front, the stock suggests a strong upward trend with retracement indicating a price trading above all the EMA level coupled MACD at 20.1 over its Signal-Line indicating a short-term rally at the regime.
The stock has a strong support at 251 level and it is facing a resistance from its 52-week high at 295, which is expected to breakout in short term. We have a BUY recommendation for Indiabulls Ventures which is currently trading at Rs. 279.6
Graphite India: BUY| Target Rs. 340 | Stop-loss Rs312 |Return 5%
After a muted moment in price and volume over a month period, Graphite India saw an upward reversal movement which contributed price to trade at all-time-high at Rs325-level. During the same session, it witnessed a decisive breakout on volume front.
Technically Graphite India is at uptrend with RSI indicating a price trading at uptrend momentum coupled with MACD breaking above its Signal-Line indicating a bullish crossover.
Similarly Moving Average analysis suggests a strong support for upward movement as price decisively breached its earlier peaks.
A major support level for the stock is seen at 305 while the resistance level will be tested at 365. We have a BUY recommendation for Graphite India which is currently trading at Rs. 325.05
Max Financial Services: BUY| Target Rs637 | Stop-loss Rs604 | Return 4%
Max Financial witnessed a considerable movement towards the weekend session despite a flat trading on the early week. It also witnessed a strong volume support over the same period which eased the price movement to trade at intraday high at Rs629 level.
On the daily chart, the stock formed a strong bullish candlestick pattern indicating the next lag of uptrend movement in the upcoming session. On the technical front, the RSI at 59.7 indicates a price being traded above its resistance level followed by bullish crossover just at the regime.
Further on the basis of EMA, the stock is currently trading on the positive bias with price trading above its 20-days EMA indicating a positive signal.
The stock is currently facing a resistance at 649 and support level at 601. We have a BUY recommendation for Max Financial which is currently trading at Rs. 615.75
Analyst: Pritesh Mehta of IIFL Private Wealth.
Tata Global Beverages: BUY| Target Rs 232| Stop Loss Rs204| Return 10%
We continue to reiterate our positive view on Tata Global Beverages. It has posted a rally of 3 percent in last week’s trade and we expect it to continue its recent momentum.
It is an up trending stock, which tends to go through a phase of consolidation after every up move. After being range bound at the top of its trend for the three weeks, the stock in the previous week finally staged a breakout.
A move prior to recent breakout could be termed as flag pattern. Flags are considered to be a continuation pattern in nature; we expect the stock to replicate the moment it had seen in early August.
Gann analysis suggests that the stock is in a strong uptrend and it also confirmed a shift in the orbit on the upside. Since it is an up trending stock, traders should always use any phase of consolidation and breakout from the same to build longs. Buy Tata Global above Rs212 with stop loss of Rs204 for a revised target of Rs232.
Britannia Industries: BUY| Target Rs4500| Stop Loss Rs4270| Return 3%
It has been consolidating at the top after a strong rally from June to August 2017. From last one month, it has been moving sideways between Rs4,340 and Rs4,180.
However, in recent phase of consolidation, the stock continues to find support around its 5-weekly EMA. On several occasions, it found support around the above-mentioned critical moving average.
In fact, the same is acting as a strong support since June 2017. Moreover, it continues to trade above the three-digit gann number of 431(0), implying strength in the recent sideways phase.
Since it is an up trending stock, traders should always use any phase of consolidation and also breakout from the same to build a long position.
A confirmation of a move above Rs4350 would result in an upside breakout and the stock could attempt Rs4,500 in the medium term. Based on above rationales, we recommend a buy on Britannia between Rs4320-4340 with SL of Rs4270 for a target of Rs4,500.
United Spirits: BUY| Target Rs2800| Stop Loss Rs2590| Return 6%
On the daily chart, the stock gave an upside breakout from a downward sloping trendline in this weeks’ trade. It suggests that the recent sideways corrective phase has ended and the trend is likely to reverse on the upside.
In the process, the stock also staged a breakout from multiple hurdle zone. It was facing resistance at 61.8% retracement of the entire move from Rs2774 to low of Rs2415. Also, the stock took support at its 10-weekly EMA post the corrective phase.
We believe a move above Rs2,650 with the expansion of volumes could see the stock touching the levels of Rs2,800 and above in the medium term. The short-term oscillators are also showing upward movement.
Keeping in mind above mentioned parameters, we recommend a buy on McDowell above Rs2,650 with a stop loss of Rs2,590 for a target of Rs2,800.
REC: BUY| Target Rs182| Stop Loss Rs163| Return 9%
It is a classic example of a stock which is going through a phase of bottoming out. It is a process, during which the stock tends to move in a narrow range doing virtually nothing. Similar such structure is seen in REC.
It took support at 50% retracement mark of the entire upmove seen from June 2016 high to May 2017 high. Thereafter, the stock has been gradually moving higher. In this week’s trade, it attempted a breakout from the consolidation phase at the bottom.
Sustenance above gann number of 169 would provide much-required ammo for the stock to surge higher. Based on above rationale, we recommend a buy on REC above Rs169 with a stop loss of Rs163 for a target of 182.
Power Grid: SELL| Target Rs 195| Stop Loss Rs215| Return 8%
Inability to sustain above gann number of 225 led to a strong reversal in the counter. Moreover, the stock has witnessed a breakdown of the structure of rising channel which corroborates our negative view on the stock.
In last week’s trade, it also fell below the point of the polarity of 213, which had acted as a base for a move towards Rs227. So, the recoveries if any are also likely to be short-lived.
Topping out pattern is clearly visible on multiple time frame which makes an ideal candidate for creating short positions. It has also confirmed a fall below the support of its 10-weekly EMA. Traders can short Power Grid Sep Futs below Rs209 with SL of Rs215 for a target of Rs195.
Analyst: Sameet Chavan, Chief Analyst- Technical and Derivatives, Angel Broking
Havells India: BUY| Target Rs 530| Stop Loss Rs493| Return 4%
The stock has been vacillating within the boundaries of two contracting trend lines since last three months. Last week, we saw a genuine attempt to traverse the upper range around 499 as the volume activity during this price development was quite encouraging.
Further, if we look at the momentum oscillators reading, the ‘RSI-Smoothened’ on the daily chart is continuing its upward trajectory by entering the overbought zone above the 70 mark. This we believe would provide the impetus for the up move.
Hence, we recommend buying this stock at current levels for a target of Rs.530 over the next 14 – 21 sessions. The stop loss now should be fixed at Rs.493.
Tata Motors: BUY| Target Rs420| Stop Loss Rs395| Return 4%
This stock has been a laggard since last few months. However, after forming a strong base around 375 for nearly four weeks, the stock has shown some encouraging sign in the latter half of the week.
A recent hurdle of 395 was thrashed with sizable volumes; indicating strong buying interest in the counter. The way momentum oscillators are shaped up; we expect the stock to extend this up move in the near term.
We recommend buying this stock for a target of Rs.420 over the next 5 – 10 sessions. The stop loss should be fixed at Rs.395.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their 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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