Pushkaraj Sham Kanitkar GEPL Capital
The markets have once again created a fresh all-time high in the week gone by and crossed 9,500 mark for the first time ever. The Nifty continued with its gradual uptrend till Wednesday; however, geopolitical pressures unnerved it as Nifty saw selling from the higher levels that have resulted in the formation of 'shooting star' bearish candlestick pattern.
On the daily chart as well, the index witnessed a gap-up opening, but failed to sustain above 9,500 levels and ended lower forming a 'Spinning' formation. Both the candlestick pattern indicates weakness in the near-term and for the coming sessions 9,370 will be very crucial as a close below it may open further weakness towards 9,000 levels.
Here are top four stocks which could give up to 17% upside in the short term
State Bank of India: BUY| Target Rs 350| Stop Loss Rs 289| Return 13%
Despite the overall somber nature of the markets and underperformance of the PSU Banks as a sector, SBI has sustained higher levels very well.
The stock price has risen to 52-week highs on the back of better than expected results. The delivered quantity has seen a good jump in the last few days, indicating a genuine buying interest in the scrip.
However, there is a drop in Open Interest (OI) over last week, indicating a lightening of positions. Traders can buy SBI with targets placed at Rs336-350 with a stop placed a bit below the Rs289 mark.
Apollo Tyres: BUY| Target Rs 275| Stop Loss Rs 218| Return 17%
In the first half on May 2017, Apollo Tyres saw a good correction from Rs 254 (the 52-weeks high) to Rs 224, post the results announcement. The fall has stabilized over the past few days, with multiple touch points created around the Rs 224 mark on an intraday basis.
The delivered quantity is at the highest in the recent past, with delivered percentage rising higher (57% vs average of 37%). The OI in futures has seen a tick down of around 11 percent on Friday, indicating lightening of overall positions.
A contra-trend is seen and we feel that the move would have legs to retest the 52-week high placed at Rs254-255 and then possibly till Rs275. The stop may be placed below the recent lows placed around Rs218 mark.
Asian Paints: SELL| Target Rs1050| Stop Loss Rs1165| Return 6%
Asian Paints failed to sustain at higher levels around Rs1,150-1,175, in spite of the fact that the move was accompanied by good volumes.
The last 3 weeks have seen Asian Paints to move onto barrier of Rs1,150-1,175, but every time the stock ended lower as compared to preceding week, a precursor to distribution.
The move on Friday indicates a negative crossover of the 3-days EMA below the 5-EMA for the third time in past 2 weeks. The average traded price of the last few days is dipping in nature, more so since the quarterly results.
“We expect the prices to touch the Fibonacci 34-DEMA placed at Rs1,080 followed by the long term 200-DEMA placed at Rs1,050. The stop loss for the trade maybe maintained a bit into the resistance barrier at Rs1,165.
Apollo Hospitals: SELL| Target Rs1138| Stop Loss Rs1305| Return 9%
For the calendar year, the stock failed to above Rs1325-1345 levels which also correspond to the flattened long term 100-WMA placed at Rs1,324.
The weekly candlestick pattern has given rise to an Engulfing Bear candle. The chart shows a similarity as compared to the first week of March 2017, wherein the prices started with a correction from Rs1,320 down onto Rs1,138.The said candle also similarly showed high volume characteristic.
Prices have closed near the 200-DMA placed at Rs1,260, which if broken may see correction onto the convergence of the 50-100 DMA placed at Rs1,211-1,218 mark.
A dive below the same may place it on targets of Rs1,138. The stop may be placed at the Bollinger Band Top at Rs1,305 level.
Disclaimer: The author is AVP - Technical Research at GEPL Capital. 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.
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!
