Kshitij Anand Moneycontrol News
The Nifty50 closed on a flat note with a positive bias for the week ended August 24. The only positive takeaway from last week's trading activity was that the index ended slightly above its crucial resistance level of 9,850.
Lack of follow-up moves was the prime reason for the current non-trending market phase. The index formed three bearish candles out of four trading sessions last week.
The index made higher swing lows in the past week which suggests the base is shifting higher, taking support near the three-digit gann number of 977(0) and also its 13-weekly EMA.
“However, a decisive move above 9,930-9,950 is must for Nifty to break free of the current congestion. As seen earlier, whenever the market struggles to clear a well-defined resistance zone (9,930-9,950), momentum tends to shift towards broader markets,” Pritesh Mehta, Head of Technical Research at IIFL Private Wealth told Moneycontrol.
“The Nifty PSU bank index has made a strong comeback after defending previous low of 3183, marked on July 10. In the process, it also managed to protect the three-digit gann number of 316(0),” he added.
Mehta further added that a move above the three-digit gannn number of 325(0) would now result in an upside orbit shift for the PSU bank index. In such uncertain market set-ups (sans any follow-through movement), focusing on out-performing stocks would be a prudent approach.
We have collated a list of top 10 money making ideas by experts which could give up to 10 percent return in the short term:
LIC Housing Finance: BUY| Target Rs710| Stop Loss Rs634| Return 8%
Post a decline of 20 percent from the peak of Rs794, the stock made a low of Rs634. However, the structure of the stock continues to remain bullish. Back in October 2016, the stock had a similar decline before resuming its uptrend.
It has taken support at its rising trendline on the broader time-frame, connecting the lows since November 2016. Recent low coincides with the midpoint of gann rule of 8. Also, the entire corrective phase managed to defend three-digit gann number of 625 before staging a reversal.
Presence of confluence of support levels, post a sharp decline, contributed to a swift recovery in last weeks’ trade. We expect the stock to build on this week’s pullback from low of Rs634 and attempt a move above Rs700.
Based on above technical parameters, we recommend a Buy on LIC Housing Finance between Rs655-660 with a stop loss of Rs634 and a target of Rs710.
DHFL: BUY| Target Rs510| Stop Loss Rs460| Return 8%
After being in a phase of consolidation at the top of its rally, it finally staged a breakout on the upside in this week’s trade. It is showing the trait of a stock which is in a strong uptrend since November 2016.
Prior to recent breakout, it went through a phase of sideways correction as the stock took support at its second line of defence as per gann rule of 8. It was placed near the midpoint of previous gann channel.
Thereafter, it provided a gradual recovery and attempted to break past the previous peak in Thursday’s trade. We expect the stock to replicate the momentum it had seen from March to April 2017.
Traders are advised to buy the stocks which are breaking out from consolidation pattern at the top. Based on above observations, we recommend a buy on DHFL above Rs474 with a stop loss of Rs460 for a target of Rs510.
Canara Bank: BUY| Target Rs370| Stop Loss Rs330| Return 9%
Post a decline from the peak of Rs375 (third week of July), the stock had witnessed a sharp correction and made a low of Rs321 on 11th August. Action thereafter could be well-described as an attempt to form a base.
Point of polarity support zone around Rs320 came into play i.e. the breakout point of the previous rally seen in April 2017. The daily chart offered an escape from the chaos of last few weeks.
Analyzing the chart from a broader perspective, Canara Bank carved out a Bullish Bat pattern that began from last week of June 2017.
Bat pattern reached to its completion stage after it hit a low of Rs320 and thereby retracing ~88.6% of the XA leg. PRZ tends to provide a temporary support for the pattern.
In Thursday’s trade, it broke out from recent base building activity, resulting in a 2 percent up move. We re-initiate buy on Canara Bank above Rs340 with a stop loss of Rs330 for a target of Rs370.
Bharti Airtel: BUY| Target Rs472| Stop Loss Rs418| Return 9%
It is currently going through a phase of consolidation at the top of its rally. It is showing the trait of a stock which is in a strong uptrend. It is moving higher along with the support of its 5-Weekly EMA since May 2017, wherein every pull back towards this critical moving average has resulted into buying opportunity.
Since last six weeks, the sideways consolidation at the top of its trend can be termed as bullish consolidation. The outcome of such sideway movements is dealt positively during an uptrend. A move above gann number of 441 would also result in a shift in the orbit on the upside.
Sustenance above the same would provide the much-needed ammunition for the stock to ascend higher. Based on above parameters, we recommend a buy on Bharti Airtel between Rs432-436 with a stop loss of Rs418 for a target of Rs472.
Gruh Finance: BUY| Target Rs560| Stop Loss Rs500| Return 10%
The stock has been consolidating at the top after a strong rally from November 2016 to July 2017. From last one month, it has been moving sideways between Rs510 and Rs460.
However, in recent phase of consolidation, the stock continues to find support around its 13-weekly EMA. On several occasions, it found support at the above mentioned critical moving average.
In fact, the same is acting as a strong support since January 2017. Moreover, it continues to trade above the three-digit gann number of 485, implying strength in the recent sideways phase.
Since it is an up trending stock, traders should always use any phase of consolidation and also breakout from the same to build a long position. A confirmation of a move above Rs520 would result in an upside breakout and the stock could attempt Rs560 in the medium term.
Based on above rationales, we recommend a buy on Gruh Finance between Rs515-520 with SL of Rs500 for a target of Rs560.
Analyst: Dinesh Rohira, Founder & CEO, 5nance.com-
Rural Electrification Corporation: BUY| Target Rs176 | Stop Loss Rs148 |Return 10%
Rural Electrification witnessed a favourable uptrend momentum after consolidating from its previous higher level where stock remains under pressure for a considerable period.
However, the momentum build-up during this week’s trading session is expected to drive the stock from its current level.
On the daily price chart, the stock formed bullish reversal pattern after forming a bearish trend for two trading period coupled with considerable volume support.
Further, the stock is currently trading at favourable price range with RSI 52 indicating a buying regime from the bull participant.
Further, the bullish crossover coupled with price trading above its 200-days EMA in its price chart, the stock currently at strong uptrend regime.
The stock facing a resistance level at 183 witnessed during the previous session and immediate support at 152-level. We have a BUY recommendation for which is currently trading at 160.8
DLF: BUY| Target Rs201 | Stop Loss Rs. 173 | Return 8%
Regardless of trading on sideways direction during this week’s trading session, DLF Ltd managed to rebound from its weekly-low and closed at a higher level.
Following a mark at weekly low at 170-level, the stock witnessed a considerable volume growth post consolidation and continued with uptrend momentum.
The technical outlook suggests stock at the upward trend with RSI at 56 which supports a buying regime, while the bullish candlestick pattern formation in its weekly price chart indicates a strong uptrend.
Further, the current is marginal lower below is 50-days EMA and any breakout from this level is expected to build next lag of momentum.
The stock is currently facing its resistance from 50-days EMA at 215 and its immediate support level is seen at 180-level. We have a BUY recommendation for DLF Ltd. which is currently trading at Rs. 186.95
Coal India: SELL| Target Rs232 | Stop Loss Rs253 |Return 4%
Coal India continued with negative outlook despite gaining marginal momentum without any major breakout from its lower level. Since its earlier peak at 339, the stock continued to breakout through its lower level forming a lower peak on a closing basis and remained under pressure.
On the weekly price chart, the stock continued to form a bearish trend pattern which is expected to keep the stock under pressure without any major breakout in short-term. Further, the price is currently below its all level, indicating a negative outlook going forward.
Further, the bearish crossover coupled with negative market sentiment is more likely to keep the stock under pressure. The stock is facing its resistance at 251-level while the support level is seen at 229. We have a SELL recommendation for Coal India which is currently trading at Rs. 241.3
Maruti Suzuki: BUY| Target Rs7845 | Stop Loss Rs7595| Return 3%
Maruti Suzuki continued to trade at sideways direction on its weekly price chart but managed to close above its crucial higher level.
The stock witnessed a major breakout after consolidating at a lower level in the previous session where it made a low of 7410 and bounced back convincingly, thus ending its consolidation phase.
On the weekly price chart, the stock continued to form higher tops for three trading session and formed a strong bullish pattern after marginal dip witnessed during the opening trade of the week. The stock witnessed a considerable volume growth following the week’s trade.
Further, the stock started to trade above its 20-days EMA price indicating a continued uptrend momentum in the upcoming session.
The stock is currently facing its resistance at 7882 and support level is seen at 7590. We have a BUY recommendation for Maruti Suzuki which is currently trading at Rs. 7612.85
Analyst: Sameet Chavan, Chief Analyst- Technical and Derivatives, Angel Broking
Chennai Petroleum: BUY| Target Rs445| Stop Loss Rs408| Time 14-21 sessions| Return 7%
We have been quite upbeat on this stock since the last couple of weeks. The stock is clearly enjoying its strong bull run and hence, has been hitting fresh record highs day by day to outperform the benchmark index.
On Thursday, the stock prices showed tremendous buying interest to confirm yet another breakout beyond the 400 mark. This is an indication that the stock is likely to extend this relentless rally.
Hence, we recommend buying this stock at current levels for a target of Rs.445 over the next 14 – 21 sessions. The stop loss now should be fixed at Rs.408 on a closing basis.
Pidilite Industries: BUY| Target Rs880| Stop Loss Rs 792| time 14-21 sessions| Return 6%
This has been one of the rank outperformers since last five years and is still going strong. After a long consolidation, the stock prices managed to traverse the recent hurdle of 822 convincingly.
If we look at the volume activity at the time of penetrating this barrier, it was quite decent and hence, indicating strong moves in the forthcoming week.
We recommend buying this stock at current levels for a target of Rs.880 over the next 14 – 21 sessions. The stop loss should be fixed at Rs.792.
Engineers India: SELL| Target Rs140| Stop Loss Rs159| Time 5-10 sessions| Return 8%
The stock price breached the ‘200-SMA’ support level placed at Rs152 amid weakness in markets last week.
As a result, a ‘Lower Top Lower Bottom’ structure on the daily chart has been formed, which is a negative sign for a short term.
The ‘RSI’ oscillator too has given a breakdown from its long term support. In the last couple of weeks, the stock managed to give a decent pullback move, which should ideally be used as a selling opportunity.
Thus, we recommend selling this stock at current levels for a target of Rs.140 over the next 5 – 10 sessions. The stop loss should be fixed at Rs.159.
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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