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Last Updated : Oct 31, 2018 08:42 AM IST | Source: Moneycontrol.com

Podcast | Stock picks of the day: Top 3 stocks that could give 7-10% return in 1 month

As per the options data, the immediate support level is seen around 10,200 and 10,000 levels whereas 10,700 will act as a strong hurdle in the November expiry.

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Abhishek Mondal

Guiness Securities

On Tuesday, the index closed below its psychological level of 10,200 at 10,198. The short-term trend is still negative because the index has failed to sustain above its rising trendline by connecting the swing lows of 6,825, and 7,894 mark.

In terms of the Fibonacci retracement, the Nifty50 closed below its 76.8 percent retracement of March 23 to August 28 up move but at the same time, there is a positive RSI divergence emerging in Nifty with MACD trading below zero line but with positive crossover, which indicates buying motive can persist at lower levels.

Now the trend reversal point in Nifty is seen on close above 10,370 (76.8 percent retracement of March 23 to August 28 up move), while on the downside, support exists at 10,170 and then 10,138 levels.

India VIX moved up 3.42 percent to 20.50. The volatility is not cooling down on expected lines, given we are entering the state election cycle. The VIX has to go down below 17 levels to confirm a short-term trend reversal.

On the Options front, maximum Call open interest of 23.09 lakh contracts is seen at strike price 11,000, followed by 10,700 which now holds 21.07 lakh contracts and maximum Put open interest of 42.45 lakh contracts is seen at strike price 10,000 followed by 10,200 which now holds 31.70 lakh contracts.

As per the options data, the immediate support level is seen around 10,200 and 10,000 levels whereas 10,700 will act as a strong hurdle in the November expiry.

Here is a list of top three stocks which could give 7-10% return in the next 1 month:

Exide Industries: Buy | Close: Rs 261.45 | Target: Rs 290 | Stop Loss: Rs 240 | Return: 10.92%

After a decent correction from its 52-weeks highs, Exide has bounced back strongly from lower levels after taking support around 200-DMA.

The Daily Relative strength index (RSI) is trading at 51.78, showing positive momentum and MACD is trading above its signal line.

Based on the above observations, traders can buy the stock in the range of Rs 258-262 with a stop loss below Rs 240 (closing) for the target of Rs 289.

Aurobindo Pharma: Buy| Close: 770.50 | Target: Rs 850 | Stop loss: Rs 720 | Return: 10.32%

In daily scale, the stock has given a breakout from its flag pattern above Rs 770-772 levels on Monday with higher volumes.

In the daily scale, Relative strength index (RSI) showing sideways to positive momentum and (+) DI trading above (-) DI whereas Stochastic %K continuously trading above %D, which indicates limited downside for the stock.

Based on the above observations traders can buy the stock around current levels and add on dips around Rs 750-755 with a stop loss below Rs 720 (closing) for the target of Rs 850.

Bharat Forge: Buy| Close: 569.50 | Target: Rs 610 | Stop loss: Rs 540 | Return: 7.11%

After small consolidation, the stock has given a breakout above Rs 562-565 levels on Tuesday with moderate volumes.

The daily Relative strength index (RSI) showing positive momentum and MACD is trading below zero line but with positive crossover, which indicates the stock price to move higher in coming days.

Traders can buy the stock in the range of Rs 565-570 with a stop loss below Rs 540 (closing) for the target of Rs 610.

Disclaimer: The author is Research Analyst, Guiness Securities. The views and investment tips expressed by investment experts on Moneycontrol are his own, and not that of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
First Published on Oct 31, 2018 08:20 am
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