Nifty started the last week on a flat note and remained in narrow trading range throughout the week. It closed at 11,789 with a gain of 65 points on a weekly basis.
On the weekly chart, the index has formed a small bullish candle with shadows on either side indicating indecisiveness amongst participants regarding the direction.
Since the past 5-6 weeks, the index is consolidating within a broad range of 12,050-11,600 representing a short-term sideways trend. Hence, any breakout or breakdown will give direction to the market.
The chart pattern suggests that if Nifty crosses and sustains above 11,880 then it would witness buying that could take the index towards 11,950-12,030.
However, if the index breaks below 11,700 it would witness selling that would take the index towards 11,650-11,550. Nifty is trading below its 20-day SMA, which is an important short-term moving average.
Nifty continues to remain in an uptrend in the medium term. Buying on dips continues to be our preferred strategy. For the week, we expect Nifty to trade in the range of 11,950-11,650 with a mixed bias.
The weekly strength indicator RSI and momentum oscillator Stochastic have both turned negative and are below their respective reference lines indicating negative bias.
Here are three stocks that could give 6-7 percent returns in next 3-4 weeks:
Apollo Hospitals: Buy | LTP: Rs 1,365.15 | Target: Rs 1,440 | Stop loss: Rs 1,322 | Upside: 6 percent
On the daily chart, the stock price has turned around after taking support at its 38.20 percent Fibonacci retracement levels of its previous rally (Rs 1,112 to Rs 1,406) on a closing basis and is sustaining above the same.
This turnaround is accompanied by an increase in volumes that supports the bullish sentiments ahead. RSI and Stochastic are in positive territory that supports upside momentum to continue in the near term.
The stock price is sustaining well above its 20, 50 and 100-day SMAs, which supports bullish sentiments ahead.
Canara Bank: Buy | LTP: Rs 284 | Target: Rs 299 | Stop loss: Rs 271 | Upside: 7 percent
On the daily chart, the stock price has decisively broken out from its down-sloping trendline levels placed at Rs 280-278 on a closing basis and is sustaining well above the same.
This turnaround is accompanied by an increase in volumes that supports the bullish sentiments ahead. RSI and Stochastic are in positive territory that supports upside momentum to continue in the near term.
The stock price is sustaining well above its 20, 50 and 100-day SMAs, which supports bullish sentiments ahead.
HDFC Life: Buy | LTP: Rs 464.60 | Target: Rs 486 | Stop loss: Rs 448 | Upside: 6 percent
On the daily chart, the stock price has decisively broken out from its consolidation range of Rs 460-435 on a closing basis and is sustaining well above the same.
This turnaround is accompanied by an increase in volumes that supports the bullish sentiments ahead. RSI and Stochastic are in positive territory that supports upside momentum to continue in the near term.
The stock price is sustaining well above its 20, 50 and 100-day SMAs, which supports bullish sentiments ahead.
(The author is Head Technical & Derivatives Research, Axis Securities.)
Disclaimer: The views and investment tips expressed by 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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