Kshitij Anand Moneycontrol News
A volatile week came to an end but one factor which will weigh on the trading community is that the Nifty is now trading below its crucial short-term moving averages. It closed below its 100-day exponential moving average (DEMA) which was placed around 10,405 for the week ended March 16.
The Nifty50 fell from an intraday high of 10,478 recorded on March 13 to close the week at 10,195, down 0.3 percent for the week. The index closed below is short-term moving averages on the weekly charts as well which does not augur well for the bulls.
The index which started the week on a high note consolidated throughout the week and closed with a big bear candle on Friday. The heavy sell-off on Friday resulted in a decent cut from weekly highs to conclude proceedings below the 10,200 mark, on the weekly basis, for the first time after December 01, 2017.
Traders are advised to stay cautious as the possibility of Nifty slipping its crucial support level of 10,000 looks higher. In the event of a fresh sell-off in the coming week in the wake of US Fed policy, strong support is placed around 10,141 levels which was recorded on March 7, suggest experts.
“As a chartist, if we look at the daily chart, this corrective move is not at all surprising. We could clearly see some relief move retesting breakdown points and a couple of key moving averages placed in the vicinity of 10,420 – 10,460 and then a resumption of a downward trajectory in the latter half,” Sameet Chavan- Chief Analyst, Technicals and Derivatives at Angel Broking told Moneycontrol.
“The weekly time frame charts turned negative recently and are clearly proving their significance. Now, traders would keep a close eye on recent swing low of 10,141 as a slide be-low this crucial junction would reinforce the selling pressure in the market,” he said.
Chavan advises traders not to make any kind of bottom fishing soon and should trade with a proper exit strategy. “For the coming week, 10,260 – 10,350 would now be seen as strong hurdles. Any possible move towards these levels is likely to get sold into,” he said.
We have collated a list of top 10 trading stock ideas by different experts which could give up to 20% return in the short term:
Sameet Chavan- Chief Analyst, Technicals and Derivatives at Angel Broking
MCX Ltd: BUY| Target Rs855| Stop Loss Rs782| Return 6%
Since the early part of February, we have been quite vocal on the possible bottoming out formation around the Rs700 mark. We remained contradictory buyers from the level of Rs730 and this strategy eventually turned out to be quite fruitful for us.
Recently, we witnessed a confirmation of the ‘Bullish Hammer’ pattern on the weekly chart and now due to Thursday’s gigantic rally, the price structure confirmed its ‘Higher Top Higher Bottom’ formation on daily chart.
Considering the volume activity in this price action, the stock is still not done with its upward move. Hence, we recommend buying the stock for a target of Rs.855, and traders are advised to follow a strict stop loss placed below Rs.782.
Tata Steel Ltd: SELL| Target Rs550| Stop Loss Rs634| Return 8%
This metal giant continues to be our preferred shorting candidate in the last month and a half. Every meaningful bounce we used as a shorting opportunity in the recent past which has paid off.
Now, finally, our anticipation turned into a confirmation during the penultimate week; adding conviction to our cautious stance.
We recommend shorting the stock on some bounce back towards Rs608 – 612, which will make the risk-reward ratio a bit favorable. One can look to go short for a target of Rs. 550 by following a strict stop loss of Rs.634.
Brokerage: SMC Global Securities Ltd
Ajanta Pharma Ltd: BUY| Target Rs1540| Stop Loss Rs1330| Return 9%
The stock closed at Rs 1410.45 on the 16th March 2018. It made a 52-week low at Rs1120.05 on 28th September 2017 and a 52-week high of Rs1852.95 on the 22nd March 2017. The 200-days Exponential Moving Average (EMA) of the stock on the daily chart is currently placed at Rs 1416.77
The stock witnessed a massive correction from Rs2100 to Rs1120 levels in a single downswing, trading in lower highs and lower lows. Then after, the stock retraced some of its earlier losses and tested 1600 levels in a short span of time.
Due to correction in broader indices, the stock also showed selling pressure and tested 61.8% Fibonacci retracement levels of upswing from 1120 to 1600 levels and started moving higher.
Last week, the stock ended over 6 percent gains and has given the signal for further upside so, buying momentum can continue for coming days. Therefore, one can buy in the range of 1390-1400 levels for the upside target of 1510-1540 levels with a stop loss below 1330 for a time period of 1-2 months.
Titan Company Ltd: BUY| Target Rs970| Stop Loss Rs820| Return 10%
The stock closed at Rs 879.25 on 16th March 2018. It made a 52-week low at Rs440.75 on 27th March 2017 and a 52-week high of Rs938.50 on 09th January 2018.
The 200-days Exponential Moving Average (EMA) of the stock on the daily chart is currently placed at Rs 713.74. The short-term, medium term and long term bias is looking positive for the stock.
It is continuously trading in higher highs and higher lows on the weekly charts, which is bullish in nature. Moreover, it was consolidating in the narrow range of 780 to 830 levels for the last five weeks with a positive bias.
It has given a breakout from the consolidation range by registered gains of over 7 percent in the last traded week and has also managed to close near week’s high to form a long “Marubozu” candlestick pattern, which indicates buying is more aggressive for the stock.
Therefore, traders can buy the stock in the range of 865-875 levels for the upside target of 950-970 levels with a stop loss placed below Rs820.
Brokerage Firm: ICICIdirect.com
Majesco Ltd: BUY| Target Rs520| Stop Loss Rs443| Return 6%
The share price of Majesco has been forming a higher peak higher trough since July 2017. Over the last five months, the stock has gone through a secondary phase of correction, retracing 50% of the last leg of up move (starting from July 2017 low of 303 to October 2017 high of | 590 levels), indicating the healthy correction.
Currently, the stock has taken support around 445, as 200 days moving average is at 448 coinciding with aforementioned 50% retracement level at 446, indicating the base formation
On Thursday, the stock gained momentum and formed a strong bull candle carrying higher high – low formation and managed to close above 20 days exponential moving average, underpinned by above 10 days average volume, signifying short-term trend change.
Among oscillators, RSI oscillator has been inching upward after finding support from July 2017 lows, confirming recent base formation. Thus, we believe the stock is likely to head higher in the near-term towards 520, as it is the 50% retracement level of the last leg of decline (604 – 441).
Godrej Agrovet Ltd: BUY| Target Rs745| Stop Loss Rs638| Return 12%
The share price of Godrej Agrovet witnessed a sharp up move and recorded a new high on the back of robust volumes, indicating an acceleration of upward momentum.
After three days of sharp up move, the price has witnessed shallow correction retracing 50% of that entire move over five sessions, indicating healthy consolidation.
The last eight session price action has taken a shape of a flag formation (as shown in chart). With Tuesday’s price action, the stock recorded breakout from the Flag formation, indicating a resumption of the primary uptrend.
On the oscillator front, the MACD indicator has been inching upward diverging from its nine days average line, confirming the aforementioned breakout. The stock is likely to head higher in the near-term towards 745 as it is the implicated target of aforementioned flag formation.
We expect the stock to hold the support of 638, being a confluence of 50% retracement level of the last leg of the rally (595 – 688) placed at 641. Five days consolidation base around 641.
Godrej Properties Ltd: BUY| Target Rs850| Stop Loss Rs715| Return 14%
The share price of Godrej Properties was consolidating in a broader range of 728–859 over two months. During two months consolidation, the stock has taken support from the gap area of January 8, 2018, on multiple occasions, indicating sturdy base formation around Rs728.
Currently, it registered a breakout from falling trend line is drawn adjoining subsequent high of 912–849 supported by above average volumes, indicating termination of an intermediate correction.
Among oscillators, RSI found support from one-year long support base of 35 and pointing upward, confirming base formation.
The stock is likely to head higher in the near-term towards 850 as it is the placement of identical highs coinciding with an upper band of broader consolidation range of 859 – 728.
Ipca Laboratories Ltd: BUY| Target Rs775| Stop Loss Rs621| Return 16%
The share price of Ipca Labs was consolidating in a sideways range of 400–650 over 18 months which took the shape of a double bottom formation.
Last week, the price recorded a breakout from the aforementioned double bottom formation, supported by above average volumes, indicating a trend reversal.
Among oscillators, MACD continues to inch upward, confirming the double bottom breakout. The stock is likely to head higher in the near-term towards 775 as it is the upper band of the upward sloping channel, while support remains near 38.2% retracement level of current up move (518–689) around 621.
NCC Ltd: BUY| Target Rs147| Stop Loss Rs115| Return 20%
The share price of NCC has undergone a secondary phase of correction, in which it found support from 102 levels as it is the 61.8% of the last leg of the rally from September 2017–January 2018 of 81–141, placed around 104, corroborating with 200 DMA placed at 101.
At present, it has recorded breakout from downward sloping trend line drawn adjoining highs of 141-132, backed by heavy volumes, indicating a resumption of the primary uptrend.
On the oscillator front, RSI indicator has been inching upward after witnessing hidden divergence, confirming the aforementioned breakout.
The stock is likely to head higher in the near-term towards 147 being the 123% external retracement level of the current decline (141-102), while support remains near 50% retracement level of the current up move (102–130) around 115.
Brokerage: HDFC Securities
CESC: SELL| Target Rs885| Stop Loss Rs1025| Return 7%
After a sharp decline, the stock price as per weekly timeframe chart has shifted into sideways range movement in the last few weeks.
After repeated testing of the immediate support at Rs970 (green dashed horizontal line), the stock price is now set to show sharp downside breakout of the support.
Hence, further sustainable weakness from here could unfold an important downside breakout, and that could have a sharply negative impact on the stock price ahead. The larger positive sequence of higher tops and bottoms seems to have broken in the last one month.
As the recent pullback rally was managed to form a lower high at Rs1045, in mid of Feb 18. This could eventually open up a formation of a negative sequence of lower tops and bottoms in the stock price for near term.
Weekly 13-period weekly–DMI and 13-period weekly ADX are showing negative indications. Both of these indicators are signaling a possibility of strengthening of downside momentum in the stock price for near term.
Disclaimer: 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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