Aditya Agarwala
The Nifty Index Futures presented a pullback rally after testing the 200-DMA placed at 10,155. A sustained trade above the 61.8 percent Fibonacci retracement level of the recent correction (i.e. 10,640-10,155) placed at 10,455 can extend the rally to levels of 10,640-10,770.
However, failure to cross the immediate resistance of 10,455 can resume the choppy and volatile trading sessions dragging the index lower to levels of 10,155-10,095.
Moreover, RSI turned down from the neutral levels of 50 in the recent pullback, this time around a move above 50 will suggest that the current pullback rally can extend higher.
Intermediate pullbacks cannot be ruled out keeping in mind that most of the stocks are displaying positive divergences on the chart, however; following this pullback gradual corrections can also resume as chart structure on the monthly time frame suggest prolonged weakness.
Here is a list of top three stocks which could give up to 17% return in the next 3-4 weeks:
Amara Raja Batteries Ltd: BUY| Target Rs915| Stop Loss Rs765| Return 13%
On the weekly chart, Amara Raja Batteries Ltd. (AMARAJABAT) is on the verge of a breakout from a trend line resistance line placed at 818 (as indicated on chart).
A sustained trade beyond the neckline of the pattern with healthy volumes can take the stock higher in the coming trading sessions.
On the daily chart, the stock is on the verge of a breakout from a channel pattern after taking support at the 61.8% Fibonacci retracement level suggesting a temporary bottom formation is in place.
Moreover, RSI has turned upwards after taking support at the 40 level indicating a shift in a range in favour of the bulls. The stock may be bought in the range of 810-815 for a target of 880-915, and a stop loss below 765.
Bajaj Auto Ltd: BUY| Target Rs3300| Stop Loss Rs2840| Return 12%
On the weekly chart, Bajaj Auto Ltd. (BAJAJ-AUTO) has turned upwards after testing the lower end of the channel suggests that the downtrend is weakening. A sustained trade above 3000 levels with healthy volumes can resume the up move.
Moreover, the stock has formed a bullish harmonic pattern suggesting bullishness in the coming trading sessions. RSI has turned upwards breaking out of the upper band of the Bollinger Bands suggesting higher levels in the coming trading sessions.
The stock may be bought in the range of 2940-2970 for targets of 3175-3300, keeping a stop loss below 2840.
PNC Infratech Ltd: BUY| Target Rs187| Stop Loss Rs147| Return 17%
On the weekly chart, PNC Infratech Ltd. (PNCINFRA) has formed a bullish harmonic pattern. PRZ is placed at 145, a sustained trade above this can resume the uptrend taking it higher
On the daily chart, the stock is on the verge of a breakout from channel resistance placed at 162; a sustained trade above this resistance on good volumes can trigger bull trend reversal. The stock may be bought in the range of 158-162 for targets of 175-188, keeping a stop loss below 147.
Disclaimer: The author Technical Analyst at YES Securities (I) 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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