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“Fresh sustainable up move is likely to begin only above the 9,710 level. Until this happens, we expect markets to consolidate further. On the downside, 9580 mark is an important support zone for Nifty,” Vijay Singhania, Founder-Director, Trade Smart Online told Moneycontrol.
Traders are advised to stay light or book profits partially and trade the rest of the positions with a trailing stop loss of 9,580-9,630 on the Nifty. The chart structure remains more or less unchanged because of lacklustre movement of the index.
However, the outcome of the US Fed meeting later in the week could chart the near-term direction for the market. Federal Reserve policy makers are forecast to raise their benchmark interest rate for the second time this year at the conclusion of a two-day meeting next week, but future commentary will be something that will be watched across the globe.
“With a near-term view, we are a bit cautious on the market after a relentless rally of five months. The broader degree chart structure remains sturdy, we believe that the much-awaited correction is now in the offing,” Sameet Chavan, Chief Analyst Technical, and Derivatives, Angel Broking told Moneycontrol.
“For the coming week, 9608–9581 would be seen as an immediate support zone. Hence, we would reiterate key observations that we mentioned in the previous article as well. All these key ratios are converging in a band of 100 points i.e. 9620–9720 and hence, we would advise traders to lighten up their positions in the mentioned zone,” he said.
Observations are:
1) The 127 percent Reciprocal retracement of the recent ‘Bullish Flag’ pattern on daily chart is at 9642.
2) The ‘Golden Ratio’ (161 percent Reciprocal retracement) of the corrective move from 8968.70 to 7893.80 is at 9624 and most importantly.
3) The ‘Multi-year Price Extension’ (127 percent of 2252.75 to 6338.50 from 4531.15) is at 9720.
The market is likely to remain stuck in a range but there will be a lot of stock specific action.
Here is a list of top 5 stock ideas which can give up to 13 percent return in the short term:
Analyst: Sameet Chavan, Chief Analyst Technical, and Derivatives, Angel Broking
CanFin Homes: BUY| Target Rs3155| Stop Loss Rs2780| Return 5%| Time 14-21 sessions
Most of the NBFC stocks have been on a roll since last many months. Clearly, this stock has been one of the outperforming stocks within this space.
Due to recent price action, we can see a formation of ‘V’ pattern on daily chart. On Wednesday, we witnessed a breakout from this pattern along with sizable volumes, indicating persistent buying interest from the market participants.
In addition, the ‘RSI-Smoothened’ Oscillator on the daily chart has crossed the 70-mark in the upward direction, which certainly augurs well. “We recommend buying this stock on a dip around Rs 2950 for a target of Rs 3155 by keeping a strict stop loss at Rs 2780,” said Chavan.
NMDC: BUY| Target Rs129| Stop Loss Rs109| Return 12%| Time 14-21 sessions
After a decent rally from Rs 64.50 to Rs 147.85, the stock has started moving in corrective phase. The correction of last three months seems to have halted as the stock rebounded after retesting its ‘Falling Trend line’ breakout levels on monthly chart (see exhibit).
The mentioned breakout levels coincide with the 38.20 percent retracement level (Rs 116) of the mentioned up move and ’20 EMA’ on the monthly chart, which is placed around Rs 113.75.
Traders are advised to buy with a target of Rs 129 in coming 14-21 sessions. The stop loss should be fixed at Rs 109.
Manappuram Finance: BUY| Target Rs 104| Stop Loss Rs 89.25| Return 9 percent| Time Period 2-3 weeks
Since last few months, this stock has been consolidating in a broad range. Recently, the prices have taken support near its '200 EMA' on the daily charts and have reverted higher.
The prices have now given a breakout from its falling trendline resistance. Also, the 'RSI' Oscillator on the daily chart is indicating a positive momentum. Considering the above setup, there is a higher probability of the stock moving higher in near term.
One should look to buy for a near-term target of Rs 104 in coming 2 – 3 weeks. Stop loss can be placed at Rs 89.25.
Analyst: SMC Capital| Time Period 1-2 months
Balkrishna Industries: BUY| Target Rs1760| Stop Loss Rs1500| Return 10%
The stock closed at Rs 1,589.80 on June 9, 2017. It made a 52-week low at Rs 650 on June 24, 2016 and a 52-week high of Rs 1623 on June 8, 2017. The 200-days Exponential Moving Average (EMA) of the stock on the daily chart is currently at Rs 1,216.42.
As we can see on charts that stock is continuously trading in higher highs and higher lows on weekly charts, which is bullish in nature. Moreover, it was in consolidation zone for two months and formed an “Inverted head and shoulder” pattern on daily charts which also suggest further buying in near term.
Therefore, one can buy in the range of Rs 1570-1580 levels for the upside target of Rs 1730-1760 levels with a stop loss below Rs 1500 levels.
Indiabulls Real Estate: BUY| Target Rs200| Stop Loss Rs158| Return 13%
The stock closed at Rs 176.75 on June 9, 2017. It made a 52-week low at 57 on November 22, 2016 and a 52-week high of Rs 179.50 on May 16, 2017. The 200-days Exponential Moving Average (EMA) of the stock on the daily chart is currently at Rs 106.06.
After testing yearly high of Rs 179 levels, the stock was consolidating in the range of Rs 155-170 levels for four weeks, forming Continuation Triangle pattern on daily charts. In the last traded week stock ended over 6 percent gains and gave the breakout of pattern with rising volume so we anticipate that buying momentum may continue for coming days.
Therefore, one can buy in the range of Rs 172-173 levels for the upside target of Rs 195-200 levels with a stop loss below Rs 158.
Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their 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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