By Shitij Gandhi
The market undertone remained bullish with the support of consistent foreign institutional investors’ (FIIs) buying and short covering. The Nifty is trading near 9,100 level and all major sectors like banks, metals, auto & reality are supporting the market trend.
Sector rotation is likely to continue further. As of now, we have seen average rollover of 40 percent. Overall derivative data indicates long rollover and most of the Nifty rollover has been done with the average of 9,130 April futures.
We have seen aggressive writing in 9100 March puts and unwinding in call indicates upside momentum to continue in the current expiry. We expect Nifty to expire in the range of 9,100-9,200.
Put writers are active in 9,000 April strikes, which indicate that strike price 9,000 should act as strong support for the April expiry. Going to next expiry, we expect the uptrend to continue for the next target of 9,400.
On the technical front, 9,020-9,050 is strong support zone for the Nifty and current trend is likely to continue towards 9,400.
Here are top five stocks, which can give up to 7-17 percent in the short term based on technical parameters:
Dabur India: BUY| Target Rs 305; Stop Loss Rs 260| Upside 10.75 percent
In the FMCG sector, Dabur is a prominent name for its exceptional performance. Since March 2016 till July 2016, the stock has rallied from Rs 230 level to Rs 320 in that short span.
However, after a sharp rally, it has been consolidating for quite long and trading in a range of Rs 300-260 as this stock has a tendency to take a pause and consolidate after the directional surge.
In the current scenario, all major moving averages are supporting prices on the daily charts and heavy volumes at lower levels suggest some fresh buying in the scrip.
Besides, in the past few sessions, the stock has also given fresh breakout from the resistance zone of multiple moving averages on the daily chart, which makes this stock more attractive around current levels.
From here now, we anticipate that the momentum may continue towards Rs 305 levels. We suggest traders to buy the stock above Rs 275 with below stop loss of Rs 260 for the target of Rs 305.
NIIT: BUY| Target Rs 96; Stop Loss Rs 76| Upside 15.5 percent
NIIT has seen a sharp fall from Rs 108 level to Rs 70 level from September 2016 to November 2016. Since then, fresh buying at lower levels has taken prices towards Rs 89 levels in January 2017, which is a 50 percent retracement level of previous fall.
However, this pull back in prices could not manage to hold and once again fell towards Rs 72 level, which is a very strong support area for the stock.
Now, in past three sessions once again heavy volumes with a sharp rise in prices pushed the stock above its 200-days EMA on the daily charts. Also, a stock staged a triangle pattern breakout above its key resistance area.
From here on, we believe that this price volume breakout has confirmed that downside of this stock is well restricted as the stock has bounce number of times from Rs 72 level in past. We suggest investors to buy the stock above Rs 83 with a stop loss of Rs 76 and a target of Rs 96.
Shriram Transport Finance: BUY| Target Rs 1,260| Stop Loss Rs 980| Upside 17 percent
Shriram Transport Finance has made a double bottom pattern around Rs 800 level on daily charts in late 2016 and from there on bounced sharply towards Rs 950 levels in very short span of time.
Since then stock went into consolidation and traded in a very thin range of Rs 900-990 levels from January 2017 to mid-March 2017.
The prices were also seen respecting its important moving averages as prices traded well below its 100 and 200 days EMA on daily charts.
However, on March 14, the stock has shown gap up opening above its 200 days-EMA with a sudden rise in volumes and also managed to test its psychological levels of Rs 1,000.
Now, in the current scenario stock has formed Bullish Flag Pattern on daily charts and has given breakout above its key resistance area of Rs 1,050 which confirms that upside in prices will likely to remain intact in coming sessions as well. We suggest to buy the stock above Rs 1,075 with a stop loss of Rs 980 and a target of Rs 1,260.
HUL| BUY| Target Rs 980; Stop Loss Rs 880| Upside 7 percent
After consolidating in a range of Rs 875-840 for more than three weeks, the stock has given break above its key resistance area and took a pause to Rs 915 levels. Since then prices were seen again consolidating in a very thin range of 890-915 levels.
On the daily charts stock is forming “bullish flag pattern” and is on verge of giving upside breakout. The sudden rise in volumes in past few sessions along with higher prices also suggests that stock may further rise in coming sessions.
Furthermore, the stock is trading well above its key moving averages on daily charts which suggest that bullish momentum to remain intact. We suggest to buy the stock above Rs 915 with a stop loss of Rs 880 for a target of Rs 980
ACC: BUY| Target Rs 1,550; Stop Loss Rs 1,370| Upside 8 percent
ACC has shown strong rally from Rs 1,270 to Rs 1,500 levels from December 2016 to February 2017. After that, prices get a pull back towards Rs 1,400 levels and went into consolidation.
Now, on the daily charts, the stock has formed a double bottom around Rs 1,380 and has seen a bounce from there. This pattern is considered to be bullish in nature.
The stock is expected to form complete ‘W’ pattern in coming sessions as far Rs 1,370 levels is intact which is just below its key support area of Rs 1,380.
The confirmation will be there when prices also manage to rise above its 200-days EMA which lies at Rs 1,437 on daily charts. We suggest to buy the stock above Rs 1,430 with a stop loss below Rs 1,370 and a target of Rs 1,550.
Disclaimer: The author is Senior Research Analyst, SMC Global Securities Ltd. 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.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
