Structurally, the index has concluded a healthy corrective phase over the last month within the larger degree uptrend.
Dancing on the tunes of global markets, Indian market opened on a firm note and hit fresh record highs. The S&P BSE Sensex rallied over 200 points to hit a fresh record high of 32,031.93 while Nifty50 inched towards 9,900 as it hit a fresh record high of 9,881.25.
US markets at record highs, rate cut hopes back home and relatively stable June quarter earnings led to a breakout above key resistance levels on D-Street.
The S&P BSE Sensex has already over 5000 points or 20 percent so far in the year 2017 and another 20 percent rally looks unlikely in the second half of the year. But, there will be a lot of stock specific action.
The party has moved to the broader market as well. The S&P BSE Mid-cap and small-cap hit fresh record highs. The S&P BSE Mid-cap index touched its all-time high of 15206.41 level while BSE Small-cap index also touched its life-time high of 16005.83 level.
“Market performance in the second half will depend more on the smoothness of GST implementations locally for July and more importantly on ECB & US Fed actions or lack thereof in September,” Rishi Kohli, MD & CIO, Monsoon Capital told Moneycontrol.
“Currently markets world over are in a bullish phase where all bad news are being overlooked and good news are bought into. It is difficult to see any particular trigger which will reverse that mood of the markets,” he said.
The Nifty too has been in an uptrend amid some consolidation in the month of June. But, Bulls managed to take over D-Street in the month if July. The index has maintained a higher low formation for eighth consecutive sessions reflecting persistent demand at elevated levels.
The resolute breakout from one-month consolidation range above 9,710 has opened the room for an extension of current up move towards 9,970 regions over the short term, suggest experts.
Structurally, the index has concluded a healthy corrective phase over the last month within the larger degree uptrend. “While the Nifty formed a higher base around key support of 9500-9450 zone, individual stocks witnessed sharper price wise correction to the tune of over 20 percent,” Dharmesh Shah – Head Technical, AVP at ICICI Direct.com Research told Moneycontrol.
“We believe this is a healthy sign as sector/stock specific profit booking has panned out while the index has maintained its higher top higher bottom sequence,” he said. The immediate support base for the index is now placed at 9,600 region.
Here is a list of top 8 stocks which could give up to 23% return in the next 6 months:
Analyst: Dharmesh Shah – Head Technical, AVP at ICICI Direct.com Research
SBI: BUY CMP – 287| Target – 325| Stop Loss – 268| Upside – 13%| Time Frame 6 months
The share price remains in a medium term uptrend consistently forming rising peaks and troughs on the weekly scale since bottoming out in early 2016. Within this uptrend, the stock has undergone periodic phases of consolidation that have provided fresh entry opportunities.
In the present scenario, we believe the stock has concluded a healthy corrective phase over the last two months and provides fresh entry opportunity to ride the next up move within the prevailing uptrend.
The stock has witnessed a strong rebound after taking support at the major value area of Rs 270 which is the confluence of lower band of the rising channel containing the entire price action since November 2016 and the long term rising 52-week moving average that has acted as strong support in the entire up move since 2016.
We believe the stock has concluded a healthy corrective phase and is set to embark upon its next major up move towards Rs325 over the medium term as it is the upper band of the rising channel in place since November 2016 which also coincides with the 123.6% retracement of the previous decline from Rs315 to Rs270.
Mahanagar Gas: BUY| CMP – 1002| Target – 1120| Stop Loss – 940| Upside – 12%| Time Frame 6 months
The share price of Mahanagar Gas is in a strong uptrend forming a higher peak and higher trough in all time frame. After hitting a life high of |1055 in April 2017, the stock has entered into a secondary consolidation phase to work off the overbought conditions developed after the strong up move in March-April 2017.
The entire consolidation over last three months has occurred above the rising 50-days moving average that has acted as strong support for the share price over the last two years. Price wise the stock has retraced its preceding two months up move (844 to 1055) by 61.8% while time wise it has consumed almost three months in the current consolidation.
Limited price wise correction and extended time-wise consolidation highlights the overall robust price structure and augurs well for the stock going forward.
We believe the secondary consolidation phase is approaching maturity and the stock provides a good entry opportunity with favorable risk/reward to ride the next up move within the larger degree uptrend.
Tribhovandas Bhimji Zaveri: BUY| CMP-92| Target – 112| Stop Loss – 82 | Upside –22% Time Frame 6 months
The share price of TBZ embarked upon a sustainable uptrend after bottoming out in the first quarter of CY16. Thereafter, the stock has maintained a rising trajectory by moving in a higher top, higher bottom formation signalling a steady uptrend.
The sideways consolidation over last two months has taken the pictorial shape of a bullish Pennant formation which is a bullish continuation pattern comprising narrow consolidation in a contracting range as bulls take a breather after a strong advance to gather steam before continuance of the up move.
We believe the stock is well placed to continue its upward trend over the coming months and, therefore, offers good entry opportunity with the favourable risk-reward setup. We expect the stock to head towards Rs112 regions over the medium term as it is the measuring implication of the two-month consolidation range
Gateway Distriparks: BUY | CMP-275 | Target – 338 | Stop Loss – 257| Upside – 23% Time Frame 6 months
The share price of Gateway Distriparks is emerging out of 30 months corrective phase. The prolonged correction has the underpinning characteristics of a secondary correction within the larger uptrend.
The stock consumed 30 months to retrace 61.8% of the previous 16 months up move from Rs 102 to Rs458. Limited price wise correction and extended time-wise consolidation highlight the underlying strength of the trend.
The entire decline since March 2015 has occurred in a well-defined falling channel marking the lower highs and lower lows. The strong up move in the current week has seen the stock post a resolute breakout past the upper band of the falling channel placed at Rs257 levels, thereby triggering a major structural turnaround implying the end of the secondary corrective phase and resumption of primary uptrend thereby offering fresh entry opportunity.
We expect the stock to continue with its current up move and retrace at least 50 percent of the entire corrective decline from Rs 458 to Rs210 placed around Rs338 levels in the medium term.
Analyst: Rohit Singre, Senior Research Analyst, Bonanza Portfolio Ltd
NCC: BUY | Target Rs 108 | Stop Loss Rs 85 | Upside 15%
The stock is trading in rising channel pattern and we have seen a recent correction from the upper band of the channel which was near 104 levels.
In Tuesday session, the stock has given a decisive breakout above its nearly one-month consolidation area with strong volume suggesting current momentum may take stock towards Rs108 levels.
The stock has formed a bottom and we have seen a good pull back in counter recently. The stock has given a range breakout in June and from there it cached the momentum towards northward.
Moreover, NCC is trading above its long term moving averages with strong supports on the downside. One can buy the stock at current levels to any dip near Rs91 levels for the target of Rs108 and a stop loss below Rs85.
Sobha: BUY| Target Rs 451| Stop Loss Rs 380 | Upside 11%
The stock has given a triple bottom breakout in late March and thereon it held above Rs350 zone. On the weekly chart, it seems that the stock is ready to break its bullish flag pattern. The stock has a strong 200-DMA support on a weekly chart placed at Rs350 levels.
On the daily chart, the stock rose after forming a positive divergence and we have witnessed strong rally from Rs240 to Rs420 level. Recently, the stock has given one more range breakout in the presence of decent volume hinting it is in a mood to continue its overall trend.
Bonanza recommends a buy on the counter for the target of Rs451 and keep a stop out level below Rs380 on a closing basis.
Redington India: BUY | Target Rs 150 | Stop Loss Rs 129| Upside 8%
The stock has broken its long consolidation phase in late April and we have seen very good upside on the counter. It took support at Rs125 zone and from there, the stock resumed its up move again.
Recently, the stock has given two breakouts back to back with a strong volume suggesting we may see more upside towards Rs150 levels in the coming sessions. We can see small positive divergence on daily charts as well on RSI which is trading near 58.
Bonanza expects the current momentum to extend further up to Rs150 and traders can take a buy call on the stock with keeping a stop loss below Rs129 on a closing basis.
Tata Sponge: BUY | Target Rs 900| Stop Loss Rs 808| Upside 6%
The stock has given a cup and handle pattern breakout in Tuesday session with good volume suggesting more upside in the near-term. The overall structure is still looking positive after recent correction from 890 levels.
Moreover, it is trading above its short and long term moving averages with multiple supports on the downside. The momentum indicator RSI reading near 61 is considered to be a bullish signal.
On the short time frame charts, the stock has broken its inverted head and shoulder pattern which is again considered to a bullish pattern.
Considering above technical setup, one can initiate a long call on stock for the target of Rs900 in near term with keeping a stop loss below Rs808 on a closing basis.Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol are their own and not that of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.