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HomeNewsBusinessStocksPodcast | Stock picks of the day: 'Nifty could hit 12,400 in medium term, stay long'

Podcast | Stock picks of the day: 'Nifty could hit 12,400 in medium term, stay long'

Short-term support is seen at 11,200 in Nifty and 28,800 in Bank Nifty, and any dip should be accumulated for the upside target of 11,760 in Nifty and 30,400 in BankNifty.

March 20, 2019 / 10:28 IST
     
     
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    Vinay Rajani

    Last week, Nifty rose 3.54 percent, while BankNifty outperformed by surging almost 6 percent in the same period. This was the highest weekly rise in BankNifty since the week ended May 27, 2016.

    BankNifty has registered a new lifetime high at 29,812 on Monday. From the bottom of February 19, 2019, Nifty has risen by about 9 percent, while the Bank Nifty has risen by 12 percent in the same period.

    The Nifty50 is in continuation of the bullish trend. Support levels are now slowly shifting upward to 11,200 odd levels. The momentum indicators like ADX and MACD are showing full strength on charts and signal further rally in the market.

    The only resistance, which we see in Nifty for the short term is the previous all-time high of 11,760, which is expected to be taken off soon.

    The target of the current uptrend is seen at 12,430 levels, which happens to be 138.2 percent Fibonacci retracement of the entire fall seen from 11,760 (All Time High registered in Aug 2018) to 10,004 (Oct 2018 Bottom).

    BankNifty is expected to continue its rally towards the next target of 30,400. A previous all-time high of 28,388 would now act as support going forward. Short term support for the BankNifty is seen at 28,800.

    The Nifty Midcap Index is on the verge of surpassing the resistance of 200-DMA. The Nifty Smallcap Index has been consolidating for the last 5 straight sessions. Surpassing the 5 days high would result into fresh breakouts in the Smallcap and Midcap Index.

    As far as world markets are concerned, Dow Jones resumed its uptrend after two weeks of a healthy correction. European markets FTSE, CAC and DAX have been going strong. Asian Markets are also placed well technically.

    So the global scenario is also favouring the bulls right now. At current levels, we see trading opportunity in the sectors like Banks, NBFCs, Energy, and PSUs. Sectors like I.T and Auto could underperform in the short term.

    To conclude, investors should remain net long in Nifty. Short-term support is seen at 11,200 in Nifty and 28,800 in Bank Nifty, and any dip should be accumulated for the upside target of 11,760 in Nifty and 30,400 in BankNifty.

    Nifty50 has got a good potential to extend the current rally towards 12,400 in the medium term.

    Here is a list of top three stocks which could give 9-13% return in next 1 month:

    PNB: Buy| LTP: Rs 86.54| Target: Rs 96| Stop-Loss: Rs 81| Return 11%

    The stock price broke out from the bullish “Symmetrical Triangle” pattern on the daily charts couple of week back which indicates the continuation of a primary uptrend.

    The stock is consolidating for the last 5 sessions. The moving average and Oscillator setup is bullish on the daily as well as weekly charts.

    Considering the technical evidence discussed above, we recommend buying the stock between CMP and Rs 83 for the target of Rs 96 and keep a stop loss at Rs 81 on a closing basis.

    IOC: Buy| LTP: Rs 163| Target: Rs185| Stop-Loss: Rs 150| Return 13%

    The stock price has given a breakout from the bullish “Pennant” pattern on the daily charts, which indicates the continuation of a primary uptrend.

    The stock has been forming higher tops and higher bottoms on the daily charts. It is now trading well above all the important moving average parameters. Indicators and oscillators have also turned bullish on the short to medium-term charts.

    Considering the technical evidence discussed above, we recommend buying the stock at CMP and average it at 155, for the target of 185, and keep a stop loss at 150 on a closing basis.

    Petronet LNG: Buy| LTP: Rs 244|Target: Rs 265 |Stop-Loss: Rs 231|Return 9%

    The stock price has given a breakout from the downward sloping trend line on the weekly charts, indicating trend reversal for the medium-term.

    The stock price has broken out from the 6 months consolidation. Moving average and Oscillator setup is bullish on daily and weekly charts.

    Considering the technical evidence discussed above, we recommend buying the stock at CMP and average it at 237, for the target of 265, and keep a stop loss at 231 on a closing basis.

    (The author is Technical and Derivative Analyst at HDFC 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.

    Moneycontrol Contributor
    Moneycontrol Contributor
    first published: Mar 19, 2019 08:25 am

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