By Shitij Gandhi SMC Global Securities Ltd
The market undertone remained bullish with the support of consistent short covering and long buildup. The Nifty is trading near 10,250 level and all the major sectors like IT, Auto & Pharma are supporting the market trend.
Sector rotation is likely to continue further as derivative data indicates bullish scenario to continue. The Nifty has multiple supports at lower levels around 10,200 and 10,100 spot levels.
We can see short covering on every dip as Option writers were active in the recent rally. We have seen Put writing in 10200, 10100 strikes along with unwinding in calls.
Among Nifty Call options, the 10500-strike call has the highest open interest of more than 58 lakh shares while 10000 put strike has the highest open interest of over 85 lakh shares in open interest respectively.
Moreover, the volatility is likely to grip the market moving forward as the market players are keenly looking at Federal Reserve policy meeting and the second phase of Gujarat assembly elections.
Here is a list of top five stocks which could give up to 17% return in the short term:
Monte Carlo Fashions Ltd: BUY| Target Rs640| Stop Loss Rs515| Return 14%
The stock has been holding well above its short and long-term moving averages and forming higher highs and higher lows on the daily charts.
In Monday’s session, prices have given a fresh breakout above the ascending triangle formation along with comparatively larger volumes.
Additionally, the stock has also tested its two-month high which can trigger follow up buying in the coming sessions as well. Traders can accumulate the stock in a range of Rs560-565 for the target of Rs640 with a stop loss below Rs515.
UFO Moviez India Limited: BUY| Target Rs560| Stop Loss Rs450| Return 11%
In the recent past, the stock is seen trading in the downward channel on the weekly charts as it has tested Rs315 levels in August 2017. However, since then, sharp recovery has been witnessed in prices.
The stock is holding well above its falling trend line of lower channel and also above its short and long-term moving averages on the weekly charts.
Additionally, the stock has also formed an inverted head and shoulder formation on the weekly interval. It gave a breakout above the neckline formation which is a bullish sign.
Traders can accumulate the stock in a range of Rs490-500 for the upside target of Rs560 with a stop loss below Rs450.
HOV Services Limited: BUY| Target Rs395| Stop Loss Rs305| Return 17%
The stock has been consolidating in the range of Rs240-340 from the last six months and formed a bullish flag formation on the weekly and monthly charts.
In Monday’s session, we have witnessed a breakout above the pattern formation, as once again buying momentum was seen in prices along with higher volumes.
Additionally, the positive divergence in the RSI indicator is also supporting the next up move. Traders can accumulate the stock in a range of Rs335-345 for the target of Rs395 with a stop loss below Rs305.
PC Jeweller Limited: BUY| Target Rs508| Stop Loss Rs395| Return 16%
Ever since the prices have given a consolidation breakout above Rs390 levels, the stock is holding well above the breakout price with consistent buying interest at lower levels through larger volumes.
Moreover, on the daily charts, the stock is trading in a rising channel and is forming higher highs and higher lows on the daily as well as on weekly intervals.
Traders can accumulate the stock in a range of 435-445 for the target of 508 with a stop loss below 395.
Redington (India) Limited: BUY| Target Rs202| Stop Loss Rs168| Return 12%
The stock has been soaring highs on daily charts and is forming higher highs and higher lows pattern. However, from the last four weeks, prices are getting consolidate in the range of Rs180-200 levels with multiple supports at its short and long-term moving averages on daily charts.
This week once again the positive divergence in stochastic and RSI indicator suggest for next up move in the stock. Traders can accumulate the stock in a range of Rs180-185 for the target of 202 with a stop loss below 168.
Disclaimer: The author is Senior Research Analyst, SMC Global Securities Ltd. The views and investment tips expressed by investment experts 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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