By Aditya Agarwal
As discussed in our last weekly article, Nifty50 respected the 161.8% price extension of its entire move from 2001–08, which pegged near 11,163 and turned sharply lower after posting an all-time high of 11171.55.
The Union Budget 2018 verdict played a catalyst role and Nifty tumbled more than 800 points from the Budget day’s high. In that pessimism, Nifty hit a low of 10,276.30, however, that said, the low coincided with the 78.6% retracement of its previous daily swing move which resulted into a relief rally in past two trading sessions.
Looking at the weekly chart formed last week, Nifty formed a Bearish Engulfing pattern and the impact of the said pattern was clearly seen in this week.
At this juncture, the Monday’s gap area of 10,703 – 10,736 will act as a strong hurdle. Any move above this level will drive index higher towards 10830.
On the flip side, the recent bottom of 10276 will act as an immediate support. Any break below this level will extend the ongoing pessimism and in that case, Nifty can correct towards 10033 which coincides with the weekly swing low and the weekly 45-EMA.
Here are the lists of three stocks which could give up to 17% return in the next 15-21 sessions:
ONGC: Buy around 185 - 180, Target 220, Stop loss 165. Time frame 15 to 21 sessions| Return 17%
Looking at the daily chart, the stock formed a bearish divergence pattern and the impact of the said pattern was clearly seen as stock corrected sharply from 213 and hit a low of 180 which coincided with the weekly 45-EMA.
Due to such correction, the daily RSI (14) has signalled oversold condition hence we expect this stock to resume its uptrend. Thus, one can buy ONGC in a range of 185 to 180 with a price target of 220. A stop loss should be placed below 165.
Dr. Reddy’s Laboratories: Buy Around 2175 - 2150, Target 2450, Stop loss 2005, Timeframe 15 to 21 trading sessions| Return 12%
The stock has seen a sharp decline in the previous week and hit a low of 2005.50. However, support based buying interest in recent days lift the bullish sentiment.
Looking at the weekly chart, despite the sharp sell-off; the weekly RSI (14) managed to hold 40 levels. Thus, one can accumulate this stock in a range of 2175 to 2150 with a price target of 2450 and a stop loss should be placed below 2005.
MOIL: Buy around 235 - 232, Target 270, Stop loss 212, Time frame 15 to 21 trading session| Return 15%
Looking at the daily chart, the stock has been in a consolidation and formed a triangle pattern. Recently, the stock took support near its previous swing low and rebound sharply.
On the weekly chart, the 9-45 EMA on price is still positive and that indicates that the current trend is up. Also, the stock has earlier signalled Positive Reversal and the said pattern is still active.
Hence, we recommend traders to buy this stock in a range of Rs235 to Rs232 with a price target of Rs270 and a stop loss should be kept at Rs212.
Disclaimer: The author Head Technical Research, Way2Wealth Brokers Pvt. Ltd. The views and investment tips expressed by investment expert 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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