Aditya Agarwal
Way2Wealth Brokers
Thursday was a historical day in the Indian market as both the Sensex and Nifty hit a fresh all-time high of 37,061.62 and 11,185.85 and eventually ended at a record closing high.
The move was largely in line with our expectation regarding the possibility of breaching its previous all-time high of early February.
At this juncture, the Nifty has entered uncharted territory. Hence, it is difficult to pinpoint resistance levels.
On the upside, 11,240, which is a conservative target of the channel pattern formed during last week, will act as an immediate resistance above which the Nifty is likely to rally towards 11,280–11,350 levels. On the flip side, 11,085 will act as an immediate support below which the next support is seen at 11,000.
July rollovers were in line with expectation, with almost 82 percent positions getting rolled over to the August series. Most sectors have seen long rollovers and that will keep the market momentum strong. Options data indicates a possible scenario of the Nifty testing 11,440-11,500 levels in the August series.
Maximum call writing has been seen around 11,500 strikes, which will act as resistance on the higher side. Put writing at 11,000 will prove as immediate and strong support for the index.
From a short-term perspective, our view remains bullish and any dip towards 11,080-11,040 can be used to initiate fresh long positions.
Here is a list of three stocks that could return 6-15% in 1-2 months:
BEML: Buy around Rs 790 - 780| LTP: Rs 793| Target: Rs 880| Stop Loss: Rs 735| Return 11%
On the daily chart, BEML is forming Wolf wave pattern and the recent low of 737.30 can be termed as a 5th wave. In line with expectation, stock saw decent buying interest in past few trading session.
The daily RSI has signaled multiple bullish divergences and with this stock has closed above its 9-SMA. We expect BEML to rally in the near-term and test Rs 880 levels.
We advocate traders to buy this stock in the range of Rs 790 to Rs 780 with a price target of Rs 880. The stop loss should be placed at Rs 735 below which our bullish view will be negated.
ITC: Buy above 291| LTP: Rs 287| Target: Rs 330| Stop Loss: Rs 274| Return 15%
ITC has been in a long consolidation for several weeks; however, this week, the stock opened higher with a gap and broke the upper band of the trend line.
Due to overall consolidation, the weekly chart resembles a formation of Ascending Triangle pattern. The weekly RSI (14) entered well inside the 60 levels.
Hence, we recommend traders to buy this stock above Rs 291 with a price target of Rs 330 and stop loss placed below Rs 274.
JSW Steel: Sell around Rs 312 - 316| LTP: Rs 312| Target: Rs 291| Stop Loss: Rs 328| Return 6%
After confirming its breakdown from the upward sloping channel formation during early July 2018, the stock slipped below Rs 300 mark and registered a low tad above its 200-DMA.
Subsequently, the stock saw decent pullback but found strong resistance near the breakdown zone and failed to hold the levels on closing basis.
At this juncture, the daily RSI (14) indicates that the stock is overbought compare to its previous bounce. Hence, we recommend traders to sell this JSW Steel around Rs 312 to Rs 316 with a price target of Rs 291. A stop loss should be placed at Rs 328.
Disclaimer: The author Head of Technical Research, Way2Wealth Brokers Pvt. Ltd. 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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