Hadrien Mendonca
Markets showed immense strength and resilience during the week. The current upswing was seen despite a weakening rupee-dollar and persistent US-China trade war concerns.
The Nifty has once again formed a ‘Doji’ kind of pattern on the weekly chart, indicating signs of uncertainty. However, it has still managed to hold above it short term averages.
At the current juncture, the index is on the verge of a sloping trend line breakout on the daily chart. A close above 10,800 would confirm the same which would then lift the Nifty higher towards 10,930 levels.
The Bank Nifty is in the middle of forming a ‘Pennant’ pattern on the daily chart. A close above this sloping trend line of 26,700 would confirm the breakout. However, a crucial support on the downside is placed around 26,140 levels.
With midcaps and smallcaps continuing to remain under immense pressure, it would be prudent to stick to quality largecaps.
Here is a list of top 3 stocks that could return 7-9% in the next 1-2 months:
ACC: Buy| Target: Rs 1,508| Stop Loss: Rs 1,335| Returns 8.5%
The stock has been consolidating for the past one month and has now finally broken out from a Double Bottom breakout on the daily chart.
The price outburst has been accompanied with a smart uptick in traded volumes as well. Positive crossovers on the short-term moving averages and strength in the RSI further accentuates our bullish stance on the stock.
We expect the current momentum to get extended and expect ACC to surge towards its potential target of Rs 1,508 in the medium term.
Hindustan Unilever: Buy| Target: Rs 1,800| Stop Loss Rs 1,635| Returns 6.5%
The stock has been in a strong uptrend in the recent past and our weekly chart analysis indicates that Hindustan Unilever (HUL) has broken out from the rising wedge pattern.
We also have observed consistent volumes uptick during the upswing. In addition, relative strength indicates that the current momentum is likely to get carried forward. Every decline in such a solid up trending stock should be an opportunity to accumulate.
Asian Paints: Buy| Target Rs 1,413| Stop Loss Rs 1,271| Returns 7.2%
After consolidating for the past seven weeks and going through a phase of price correction, the stock has finally broken out from a ‘Flag Pattern’ on the weekly chart.
In terms of volumes, the stock has witnessed a constant rise in volumes in the past four weeks which adds strength to the current breakout.
We expect Asian Paints to make an attempt to move higher towards its potential target of Rs 1413 in the medium term.
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.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
