Achin Goel
Though the Indian market started off on a negative note on Wednesday following weak Asian sentiment, the bias remained positive. The index touched an intraday low of 10,689 in the opening trades and hit a high of 10,766 towards close.
After Tuesday’s weak session, bulls came to challenge the bears and ended with a win for the day, notching gains of 23.90 points. The index is trading well above its 200-DEMA (double exponential moving average) on the daily chart. Moreover, its 21-EMA and 50-EMA are in a positive crossover which adds to the market bullishness.
Momentum indicator, relative strength index (RSI) (14) is in a bullish crossover with a current reading at 60.07 on the weekly chart. This suggests possibility for further short-term upsides in the index. Another indicator, moving average convergence divergence (MACD) is in a bullish crossover and hovering above the “Line of Polarity”, which again suggests positive momentum in the days to come.
On the higher side, the Nifty may move towards 10,910 and 11,030 over the short-term. On the lower end, support is pegged at 10,550.
Here is a list of top five stocks that could deliver up to 14% return in the short-term:
L&T Infotech Ltd: Buy| Target: Rs 1,700| Stop loss: Rs 1,467|Return 10%
On the daily chart, the stock has given a breakout from its range bound pattern, which suggests a reversal of the previous sideways trend.
The recent up move in the price was backed by an increase in volumes. In addition, the price found support above its 21-EMA which has induced a pullback in the stock price.
On the weekly chart, the price has been in an ascending pattern. Traders can accumulate the stock in the range of Rs 1,545-1,535 for the target of Rs 1,700 and a stop loss below Rs 1,467.
Arvind Ltd: Buy| Target: Rs 481|Stop loss: Rs 414| Return 10%
The stock has moved above its previous peak on the daily chart. In addition, the stock has been making the higher top and higher bottom formation on the daily charts.
The rise in price was backed by a surge in volume. In addition, the price has crossed above 61.8% of the previous fall from Rs 478 to Rs 361.
The momentum indicator, such as RSI (14) on the weekly frame is in a bullish crossover with a current reading placed at 57.72.
The daily MACD is hovering above the Line of Polarity. Traders can accumulate the stock in the range of Rs 435-430 for the target of Rs 481 with a stop loss below Rs 414.
ICICI Prudential Ltd: Buy| Target: Rs 506| Stop loss: Rs 429| Return 12%
On the daily chart, the stock has given a Flag Pattern breakout which may propel the stock for a rally in the short term. On the weekly chart, the stock has given a falling trendline breakout which indicates the reversal of the previous trend.
A positive crossover of 21-EMA and 50-EMA is expected to provide bullishness to the counter. Moreover, the momentum indicator, weekly RSI (14) is in bullish crossover and rising.
Another momentum indicator, MACD has moved above its signal line on the daily chart. Traders can accumulate the stock in the range of Rs 447-452 for the target of Rs 506 with a stop loss below Rs 429.
Indian Bank Ltd: BUY| Target RS.378|Stop Loss Rs.324|Return 10%
The stock has moved above its previous “inflection point” on the daily chart which indicates bullishness going forward. On the weekly chart, price has moved above the previous peak.
Also, the price has been sustaining above its 50-EMA for the last three days suggesting resilience of the current uptrend. The momentum oscillator, RSI (14) is in a bullish crossover and rising.
MACD on the daily chart is also in a buy mode. Traders can accumulate the stock in the range of Rs 340-345 for the target of Rs 378 and a stop loss below Rs 324.
KRBL Ltd: Buy| Target: Rs 610| Stop loss: Rs 494| Return 14%
On the weekly chart, the stock has given a breakout of its range-bound pattern, which suggests a reversal of the previous sideward trend.
In the recent up move, the price has moved above its 50-EMA on the daily chart. In addition, the price has also moved above its 50 percent of the previous fall from Rs 652 to Rs 428.
Moreover, a momentum indicator, RSI (14) has come out of the oversold zone on the daily chart. Daily MACD has entered in the positive crossover. Traders can accumulate the stock in the range of Rs 530-535 for the target of Rs 506 and a stop loss below Rs 494.
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.
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