Rajesh Palviya
The Nifty started the week on a flat note and remained in a narrow trading range throughout the week. The index closed at 11,048 with a loss of 62 points for the week ended August 16.
On the weekly chart, the index has formed a bearish candle and remained restricted within the previous week's high-low range indicating a lack of strength on either side.
The index is moving in a lower top, and lower bottom formation on the daily chart indicating negative bias.
The chart pattern suggests that if Nifty crosses and sustains above 11,100 levels then it would witness buying which would take the index towards 11,200-11,260 levels.
However, if the index breaks below 10,900 level then it would witness selling pressure which would take it towards 10,800-10,750.
The Nifty is trading below 20, 50, 100 and 200-day SMA's, which are an important short-term moving average, indicating negative bias in the short term.
The Nifty continues to remain in an uptrend in the medium term, so buying on dips continues to be our preferred strategy. For the week, we expect Nifty to trade in the range of 11,250-10,900 with a positive bias.
Here is a list of top three stocks which could give 5-12 percent return in the next three to four weeks:
IDFC First Bank: Buy| LTP: Rs 45.60| Target: Rs 48-50| Stop Loss: Rs 42| Upside 8-12 percent
On the daily chart, the stock price has decisively broken out from its “down sloping trend line” resistance around the Rs 44.85-45 levels on a closing basis and is now sustaining above the same.
This breakout is accompanied with an increase in volumes which supports bullish sentiments ahead.
The daily as well as weekly strength indicator RSI and the momentum indicator Stochastic both have turned positive which supports upside momentum to continue in the near term. The stock price is sustaining well above its 20-days SMA which supports bullish sentiments ahead.
Hero MotoCorp: Buy| LTP: Rs 2,669| Target: Rs 2,770-2,810| Stop Loss: Rs 2,545| Upside 5-6 percent
On the weekly charts, the stock has confirmed the “Hammer”-Reversal pattern and is also sustaining above the same indicating a shift of trend towards the upside.
This rising price is accompanied with an increase in volumes which supports bullish sentiments ahead. The weekly strength indicator RSI and the momentum indicator Stochastic both are in positive territory which supports upside momentum to continue in the near term.
The stock price is sustaining well above its 20, 50 and 100-day SMA which supports bullish sentiments ahead.
Mahindra & Mahindra Financial Services: Buy| LTP: Rs 321.10| Target: Rs 333-340| Stop Loss: Rs 298| Upside 5-8 percent
On the daily chart, the stock price has decisively broken out from its “consolidation range” levels of Rs 320-290 on a closing basis and is sustaining above the same.
The daily strength indicator RSI has turned positive which supports the upside momentum to continue in the near term and the weekly momentum indicator Stochastic is turned positive which supports upside momentum.
The stock price is sustaining well above its 20-day SMA which supports bullish sentiments ahead.
The author is Head Technical & Derivative Research Equity at Axis Securities
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