It was a historic day for our market as Nifty50 index managed to surpass its previous all-time high of 10,137 in the opening trade with a decent gap on Monday.
Throughout the day, the index maintained its positive bias and eventually ended near the highest point of the day. With reference to our previous update, we have repeatedly suggested not to short this market as the higher degree chart structure along with the placement of RSI (14) momentum indicator was still in the favour of the bulls.
Going forward, we expect Nifty to rally towards 10,200-10,250 and any weekly closing above 10,200 will confirm that the current trend is still up.
In the short term, 10,200 level will act as resistance for Nifty. We saw Call writing in 10,200 and 10,300 strike options. However, on the positive side, put writing was seen at 10,100-10,000 which will prove as a strong support zone for indices.
Overall, the outlook for broader indices remains bullish and the current technical setup suggests buy on dips.
Indices may pause around 10,200-10,250 levels for few days and may consolidate but any profit booking/retracement can be used to accumulate fresh longs with targets of 10350-10400 levels.
Here are the lists of 4 stocks which could give up to 24% return in the short term:
PVR: BUY| Target Rs1650| Stop loss Rs1199| Time frame is one to two month| Return 24%
Looking at the weekly chart, PVR has formed a strong base near Rs1285 to a Rs1225 zone which coincided with multiple supports.
First, the previous resistance zone of September 2016 & November 2016 reversed its role post the breakout. Also, the 61.8% retracement of its previous weekly swing move comes near this zone.
The weekly RSI (14) came near the 40 levels post the bearish divergence. The last month candle resembles spinning top pattern indicating exhaustion of selling pressure.
Considering the above technical pattern, we recommend traders to buy the stock at the current level of Rs1323 with a price target of Rs1650. A strict stop loss should be placed below Rs1199.
SPARC: BUY around 408 to 403| Target Rs500| Stop loss Rs365| Time frame 15 to 21 trading sessions| Return 22%
Looking at the weekly chart, the stock has seen a decent momentum in the last few weeks and in that optimism it registered a high of Rs431.
Subsequently, the stock has seen a decent profit booking towards Rs365; however, support based buying interest during last week immediately pulled index higher.
Due to the recent rally, the weekly 9-EMA of RSI (14) entered above 60 level hence we expect acceleration in coming trading session.
Also, the weekly Higher Top Higher Bottom formation is still intact. Hence, we advocate traders to buy this stock in the range of Rs408 to Rs403 with a price target of Rs500. A stop loss should be placed below Rs365.
L&T: BUY around 1235 to 1220| Target Rs1370| Stop loss Rs1170| Time frame 15 to 21 trading session| Return 11%
After witnessing a sharp rally from the bottom of around Rs860, stock registered a high of Rs1208 which was a tad below its previous multiple resistance.
Subsequently, stock consolidated in a narrow range and eventually formed a triangle pattern. During last week, stock confirmed its breakout from said pattern and registered a fresh all-time high of 1234.
The weekly RSI (14) momentum suggest further up move in coming trading session. Hence, we suggest traders accumulate this stock in a range of 1235 to 1220 with a price target of 1370. Stop loss should be placed below 1170.
Just Dial: BUY around 405 to 400| Target Rs460| Stop loss Rs375| Time frame 15 to 20 trading session| Return 12%
After a sharp correction in the past few months, the stock formed a decent base formation near Rs360 – 340 zones. Subsequently, stock consolidated in a narrow range and recently stock confirmed its breakout from consolidation.
Also, we are seeing a formation of Higher Top Higher Bottom formation on daily chart. Going forward, we expect this momentum to continue and the stock to rally towards Rs460. A strict stop loss should be placed below Rs375.
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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