Hadrien Mendonca
The Nifty50 finally has broken the Lower Top Lower Bottom structure as the index not only surpassed but also closed above the 10,480 resistance zone.
However, after snapping its 9-day winning streak indices resumed its up move on Thursday indicating that bulls are not letting go that easily.
Going forward, the 10,560-10,570 zone is crucial for the bulls, post which 10,630 is going to prove a very strong resistance.
Although the momentum is starting to fade slightly, it would be wise to keep riding this uptrend till it bends with a bit of caution.
The 10,480 level which was the immediate previous peak (resistance) for the Nifty would now act as a strong support area for the index.
Bank Nifty, on the other hand, is showing signs of fatigue too. However, there are multiple support levels going forward. The 100-DEMA is around the 25,080 and its 50-DEMA is placed around 25,000 levels.
On the upside, a break above 25,400 would lead to a fresh breakout leading to another round of upswing.
Here is a list of top three stocks which could give up to 11% return in the short term:
V-Guard Industries Ltd: BUY| Target Rs 276| Stop Loss Rs232| Returns 12%
The stock has been oscillating between Rs 200 and Rs 250 for the past four months. During this phase, V-guard formed a Symmetrical triangle pattern and is finally on the verge of breaking out of the same on the weekly chart.
The daily chart analysis indicates that the breakout has already happened which further accentuates our bullish stance on the stock.
Rising volumes and relative strength further indicate that the momentum is likely to extend further. We expect the sock to make an attempt to rally towards its potential target of Rs 276 in the medium term.
Yes Bank Ltd: BUY| Target Rs 348| Stop Loss Rs 306| Returns 9.5%
The stock has been in a base building phase for the six months during which Yes Bank formed an inverse head and shoulder pattern.
This bullish pattern formation after a correction witnessed from Rs 367 hit in the first week of February to lows of Rs 285 hit in last week of March is indeed an early sign of reversal.
A break and close above Rs 320 would confirm the breakout post which we expect Yes Bank to rally towards its potential target of Rs 348 in the medium term.
Sunteck Realty Ltd: BUY| Target 470| Stop Loss Rs 413| Returns 9%
The stock has broken out from a Symmetrical Triangle pattern on the daily chart. The price outburst has been accompanied by a smart uptick in traded volumes too.
Sunteck has also convincingly closed above its short-term averages which add conviction to our bullish stance.
Disclaimer: The author is 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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