Hadrien Mendonca IIFL
The Nifty formed a 'Spinning Top' kind of candlestick pattern on the daily chart during the week and the index has now closed below the low of the pattern which indicates that further selling cannot be ruled out in the near-term.
This could well be termed as a healthy pullback creating further space on the upside for the markets. For a fresh breakout, Nifty has to close above 11,390 levels convincingly while a crucial support going forward for the index is placed at 11,850 levels and 11,100 levels.
Bank Nifty on the other hand too continued to get weaker. Especially, the private banks have lost further ground. For the Bank Nifty to witness a fresh breakout it has to break past the 27,870 levels, while, 27100 is the support for the Bank Nifty
The midcap and smallcap space continued to outperform even in this week registering the second consecutive week of smart gains. We expect the broader indices to play a catch up with benchmarks.
The Nifty Pharma index witnessed a falling trend line break-out on the weekly charts indicating that the pharma space could well be in demand going forward.
Following is a list of stocks that could deliver up to 7-9% returns
IndusInd Bank: Buy| Target: Rs 2,204| Stop Loss: Rs 1,931| Returns 9%
One of the better-placed banks on the daily as well as on the weekly charts. In fact, after consolidating for over 11-weeks the stock has broken out from a consolidation pattern which is a very positive sign.
The relative strength index (RSI) has held up above the 60 mark maintaining the strength in the current momentum.
This further accentuates out bullish stance on the stock. We expect, IndusInd Bank to outperform going forward and has potential to move higher towards its target of Rs2204 in the medium term.
Pfizer Ltd: Buy| Target: Rs 2,910| Stop Loss: Rs 2,705| Returns 7%
We continue to remain bullish on Pfizer as the stock has broken out from a fresh continuation pattern on the daily charts. Pfizer has resumed its previous primary trend which is up.
We expect the stock to make a steady move higher towards its potential target of Rs 2910 levels in the medium-term.
Abbott India: Buy| Target: Rs 8,498| Stop Loss: Rs 7,615| Returns 7.5%
The stock has shown immense strength in the previous week and has finally broken out from another consolidation phase on the daily charts.
The upthrust in the breakout has also been accompanied with a smart uptick in traded volumes. In addition, the relative strength also indicates that the stock has the potential to carry forward the momentum.
Every long position should be protected with a stop loss at Rs 7615 levels on closing basis.
Disclaimer: The author is a Senior Technical Analyst, IIFL. 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.
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