Failure to sustain above 11050 may induce a bigger correction in the market. Whereas on the higher end sustained trades above 11500 may negate the short term weakness and the Nifty may start moving up once again.
The market witnessed a bout of volatility during the fag end of the session before closing lower on March 27. On the daily chart, the index closed with a red candle body which is hanging over the previous green candle.
Though the latest red candle doesn’t qualify as a proper dark cloud cover, it may contain some venom of a dark cloud cover.
The daily strength indicator has come out of its overbought zone and it is currently comforting below 70. On the weekly chart, the index is seen consolidating after a smart rally.
Going forward, the index may witness some bit of downward consolidation which may take the index towards 11,200-11,050 which is the previous swing high on the daily chart.
Failure to sustain above 11,050 may induce a bigger correction in the market. Whereas on the higher end, sustained trades above 11,500 may negate the short-term weakness and the Nifty may start moving up once again. Short to medium-term outlook remains strong as long as Nifty holds above 11,050.
Here is a list of top three stocks which could give 6-8% return in 1 month:
RBL Bank: Buy| CMP: Rs 668.50 | Target: Rs 722|Stop Loss: Rs 644|Return 8%
The stock has given consolidation pattern breakout which pushed the price higher. In addition, the price has moved above the previous swing high. Weekly RSI (14) is in bullish crossover and rising with a current reading of 69.
Traders can accumulate the stock in the range of 665-670 for the target of 722 with a stop loss below 644.
IGL: Buy| CMP: Rs 305.65 | Target: Rs 324|Stop Loss: Rs 296|Return 6%
On the weekly frame, the stock has moved above previous swing high and has been consolidating since then. The stock is seen trading comfortably above 200SMA as well as 100SMA where the duo is having a bullish crossover.
The daily MACD is in bullish crossover and currently reading above the line of polarity. Traders can accumulate the stock in the range of 304-307 for the target of 324 with a stop loss below 296.
Gruh Finance: Buy| CMP: Rs 269.05 | Target: Rs 290|Stop Loss: Rs 256.40|Return 8%
The stock has moved up smartly after forming tweezers bottom at 257 on the daily frame. In addition, the stock has witnessed a six days highest closing suggesting a rising optimism.
The daily strength indicator RSI (14) has entered in a bullish crossover with a current reading above 56. Traders can accumulate the stock in the range of 267-270 for the target of 290 with a stop loss below 256.40.
(The author is a Technical Research Analyst at Bonanza Portfolio Ltd.)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.