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Last Updated : Jun 07, 2018 10:36 AM IST | Source: Moneycontrol.com

Nifty to face resistance at 10,770; 5 stocks that could return 10-12% in the short term

On the daily chart, the index seems to have found support at the lower band of the rising wedge which led to a 100 points rally. The trend looks positive as the Nifty managed to float above its 50-day exponential moving average (EMA).

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Achin Goel

The Indian stock started Wednesday on a positive note and remained in the green throughout the session. The index had formed a Hammer shaped candle on Tuesday which indicated bullishness. This continued into Wednesday’s trading session.

On the daily chart, the index seems to have found support at the lower band of the rising wedge which led to a 100 points rally. The trend looks positive as the Nifty managed to float above its 50-day exponential moving average (EMA).

Momentum indicator moving average convergence divergence (MACD) witnessed a bullish crossover and is currently hovering above the signal line. The relative strength index (RSI) is in a bullish crossover with no visible divergence on the daily chart.

Going forward, the bias is looking slightly on the positive and the upmove can extend towards 10,770. A conclusive move above 10,770 may result in a movement towards 10,910 levels. At the lower end, support is visible at 10,550, below which the current short term uptrend may reverse.

Here is a list of top five stocks that could return 10-12 percent return in the short term:

ACC Ltd: Buy| Target Rs 1,450| Stop Loss: Rs 1,249| Return 10%

On the daily chart, the index formed an engulfing pattern which suggests waning bearishness among the traders. The stock price has formed a double bottom around Rs 1,265 and moved up a bit.

In addition, positive divergence is visible in the momentum indicator RSI (14) on the daily chart. Traders can accumulate the stock in the range of Rs 1,310-1,316 for the target of Rs 1,450 and a stop loss below Rs 1,249.

Bharat Electronics Ltd: Buy| Target: Rs 130| Stop Loss: Rs 109| Return 12%

The stock has formed a bullish Harami Cross pattern on the daily chart which suggests waning bearishness. In addition, the price has given a breakout from the range-bound pattern on the daily chart which shows the growing optimism in the stock.

In addition, positive divergence is visible in the momentum indicator RSI (14) on the daily chart. Traders can accumulate the stock in the range of Rs 114-116 for the target of Rs 130 and a stop loss below Rs 109.

Federal Bank Ltd: BUY| Target RS.93|Stop Loss Rs.78|Return 12%

The stock price has formed a double bottom around Rs 80 and moved up a bit. On the daily chart, a bullish Harami is visible which suggest a bullish reversal in the stock.

In addition, a positive divergence is visible in the daily RSI (14) which is also a bullish setup. Traders can accumulate the stock in the range of Rs 81-83 for the target of Rs 93 and a stop loss below Rs 78.

Arvind Ltd: Buy| Target: Rs 434| Stop Loss: Rs 369| Return 10%

The stock price has moved above the downwards consolidation pattern on the daily chart and has given a breakout from the falling trend line which suggests reversal of an ongoing bearish pattern.

In addition, the stock has formed a double bottom around Rs 370. Traders can accumulate the stock in the range of Rs 390-395 for the target of Rs 434 and a stop loss below Rs 369.

Apollo Tyre Ltd: Buy| Target: Rs 300| Stop Loss: Rs 258| Return 10%

On the daily chart, the stock is trading within a falling channel and in its recent move, the price has reached the lower band of the said channel. The proximity to the lower band is expected to provide short-term pullback in the stock.

In addition, the stock has given a breakout of its range-bound pattern which may propel the stock upward. Traders can accumulate the stock in the range of Rs 270-272 for the target of Rs 300 with a stop loss below Rs 258.

Disclaimer: The author is Head of Wealth Management and Financial Planning, Bonanza Portfolio Ltd. The views and investment tips expressed by investment experts 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.
First Published on Jun 7, 2018 10:35 am
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