Podcast | Stock Picks of the Day: Nifty likely to remain volatile on geopolitical tensions

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Shitij Gandhi

After a sharp gap-down opening on Tuesday, Indian markets tried to recoup some losses during the day as Nifty managed to close above 10,800-mark after a volatile session.

As we are heading towards February future and options expiry on Thursday, we expect markets are likely to remain volatile on the back of ongoing geopolitical tensions and developments on global front regarding the US- China trade deal.

However, from a derivatives perspective, 11,000 will act as a key resistance level for the Nifty as call writers are holding maximum OI of nearly 45 lakh shares at this strike.

However, on the downside, 10,700-10,600 levels will act as a good support zone for the Nifty, moving forward. We expect the current trend to remain choppy for the index this week as well with some stock-specific action on cards.

Here is a list of 3 stocks which could give 8-9% return in the next 1 month:

Tata Consultancy Services: Buy| LTP: Rs 2,032| Target: Rs 2,200| Stop Loss: Rs 1,920| Upside 8%

After testing Rs 2,100 levels in the recent sessions, the stock witnessed profit booking at higher levels and once again it retraced back towards Rs 1880 levels to take support at its 200-days exponential moving average on the daily interval chart.

This week, we have seen a V-shaped recovery into prices as the stock was constantly trading above its short-term moving averages along with hefty volumes and rise in price. Traders can accumulate the stock in a range of Rs 2030-2040 for the upside target of Rs 2,200 levels and a stop loss below 1920.

Bajaj Finserv: Buy| LTP: Rs 6,427| Target: Rs 7,000| Stop Loss: Rs 6,050 | Upside 9%

The stock has been trading in a downward sloping channel since January 2019 with the formation of a lower high and lower bottom pattern on the daily as well as weekly charts.

Last week after taking support at its 200-days exponential moving average on daily charts, the stock took a V-shaped recovery from lower levels and gave a channel breakout above the falling trend line.

This week as well, some large volumes emerged into the stock along with a rise in price, which point towards more upside in the coming sessions. Traders can accumulate the stock in a range of 6400-6450 for the upside target of 7000 levels and a stop loss below 6050.

REC: Buy| LTP: Rs 134.30| Target: Rs 146| Stop Loss: Rs 124| Upside 9%

The stock has been consolidating in a broader range of 115-130 for more than two months now along with consistent buying emerging at lower levels.

However, this week, we have observed a fresh breakout into prices after a prolong consolidation along with positive divergence on the secondary oscillators.

Additionally, we have also observed a bullish flag breakout on the weekly charts. Traders can accumulate the stock in a range of 132-133 for the upside target of 146 levels and a stop loss below 124.

(The author is a Senior Research Analyst, SMC Global Securities Ltd.)

Disclaimer: 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.