Podcast | Stock picks of the day: Immediate hurdle for Nifty is placed at 12,000

Vinay Rajani

The Nifty50 has been gradually moving up after finding support at its 50-days moving average (DMA), currently placed at 11,708. The Nifty50 has reclaimed a level above its 20-DMA which is currently placed at 11,840.

Now, the Nifty is trading above all important moving average parameters, indicating a bullish trend on all time-frames. The immediate resistance for the Nifty is seen at 12,000 odd levels, which happens to be the previous top on the daily charts.

BankNifty has been outperforming Nifty and is placed better on the charts. It is advisable to hold longs in BankNifty with a stop loss of 30,800 on closing basis.

From the derivative front, the highest OI is seen at 11,500 strikes in Put and 12,000 strikes in Call. On July 1, we have seen put writing at 11,800 and 11,900 strike prices, which indicates limited downside in Nifty from here.

On the upside, Call writing has been witnessed in 12,300-12,400 strikes. This setup indicates that there are higher chances of Nifty crossing a hurdle of 12,000 in the short term.

Here is a list of top three stock which could give 8-11 percent return in the next three-four weeks:

SBI: Buy| LTP: Rs 361| Target: Rs 400| Stop-Loss: Rs 340| Upside 11 percent

The stock has broken out from the last 10 quarters price consolidation. Recently, it registered a new all-time high.

It has surpassed the crucial double top resistance of 351.50 and has been sustaining above it. Moving average and oscillator setup are bullish on medium to long-term charts.

Considering the technical evidence discussed above, we recommend buying the stock at CMP for the target of Rs 340, and keep a stop loss at Rs 400 on a closing basis.

Federal Bank: Buy| LTP: Rs 109| Target: Rs 120| Stop-Loss: Rs 103 | Upside 10 percent

The stock is trading at its 52-week high. Recently, it registered a bullish “Flag” pattern breakout on the daily charts. Higher tops and higher bottoms are seen on the weekly charts as well. The stock is trading above all important moving average parameters.

Considering the technical evidence discussed above, we recommend buying the stock at CMP, for the target of 120, and keep a stop loss at 103 on a closing basis.

CESC: Buy| LTP: Rs 785| Target: Rs 850| Stop-Loss: Rs 760 | Upside 8 percent

Power stocks have been in a limelight recently. The stock formed a bullish “Flag” pattern breakout which was recorded on 25th June 2019 followed by the consolidation in the next four sessions.

Looking at the setup it seems that it will resume its primary uptrend. Oscillators have been showing strength on the charts.

Considering the technical evidence discussed above, we recommend buying the stock at CMP for the target of 850 and keep a stop loss at 760 on a closing basis.

(The author is Technical and Derivative Analyst at HDFC Securities)

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