By Aditya Agarwal Way2Wealth Brokers Pvt. Ltd
After confirming its breakout from the broad consolidation pattern in the previous week, Nifty witnessed follow-up buying throughout the last week and hit another milestone by posting a fresh all-time high of 10366.15.
In the process, index concluded the week with a gain of 1.74 percent over its previous week close. During last week, the S&P BSE Sensex eventually confirmed the move of Nifty50 by surpassing its previous all-time high of 32,686 (August 02, 2017).
Looking at the weekly chart, we are seeing the formation of Bearish Divergence as price and RSI (14) failed to confirm its each other. The Nifty ended a tad above 127% reciprocal of its entire move from the top of 10,179 to the bottom of 9,688.
In Monday’s trading session, Nifty continued its northward move and closed above 10,350 levels with gains of almost 40 points. Going forward, we maintain our positive stance and expect the index to rally towards 10480 which coincides with the 161.8% reciprocal of its swing move from the top of 10179 to the bottom of 9688 above which Nifty may rally towards 10565 whereas on lower end 10240 / 10125 are the near-term support.
Call writing was seen at 10,400-10,500 which will also act as stiff supply zone for the Nifty in the short term and some consolidation is expected in that 100-points band before any fresh big upmove is seen.
Here is a list of top 4 stocks which could give up to 28% return in short term:
Titagarh Wagons Ltd: Buy Around 137 - 134, Target 164, Stop loss 123. Time frame 15 to 21 sessions| Return 18%
The stock consolidated in a narrow range and formed a Triangle pattern on weekly chart. During last week, stock confirmed its breakout from said pattern.
The weekly RSI (14) entered above 60 levels and with this weekly Bollinger Band has also started expanding. Hence, we recommend traders to accumulate this stock in a range of 137 to 134 with a price target of 164 and stop loss placed below 123.
Hero Motocorp: Buy Around 3840 – 3820, Target 4123, Stop loss 3700, Time frame 15 to 21 trading sessions| Return 7.5%
After posting an all-time high of 4092; stock corrected gradually in past few weeks. However, the fall got arrested near 3660 which coincided with its previous weekly swing lows.
Recently, stock consolidated in a narrow range and formed a triangle pattern. On a weekly chart, stock post the bearish divergence, the RSI (14) momentum indicator signals an oversold condition.
Considering the above evidence, we advocate traders to buy this stock in a range of 3840 – 3820 with an upside price target of 4123 and Stop loss placed at 3700.
DLF: Buy Above 190, Target 240, Stop loss 172, Time frame 15 to 21 trading session| Return 28%
Looking at the weekly chart, the stock has seen sharp run-up from the bottom of 100 and rallied till 214. Subsequently, stock corrected and traded in a narrow range.
In the process, the weekly chart formed an Inverse Head & Shoulder pattern and recently tested the neckline of said pattern which is pegged near 190. The weekly 9-45 EMA on price is still positive indicating the current trend is up.
The daily RSI (14) started entering inside the 60 levels. Hence, we advise traders to buy this stock above 190 with a price target of 240. Stop loss should be placed at 172.
Glenmark Pharma: Buy At 617, Target 685, Stop loss 590, Time frame 15 to 20 trading session| Return 12%
The stock has been under tremendous pressure for several months and in that pessimism, the stock hit a fresh 52-week low of 566. Subsequently, a pullback was seen towards 641 but stock failed to hold its gains and resumed its downtrend.
Glenmark found support near 61.8% retracement of its entire daily swing move and consolidated further. In that consolidation, the daily Bollinger band index squeezed significantly.
Recently, stock confirmed its breakout from said consolidation. The daily RSI (14) found support near 40 levels. Hence, we expect this stock to rally in coming weeks thus once can enter a long position at 617 with a price target of 685. Stop loss should be placed at 590.
Disclaimer: The author is Head Technical Research, Way2Wealth Brokers Pvt. Ltd. The views and investment tips expressed by the 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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