By Aditya Agarwala
The Nifty50 index started the April F&O series on a positive note gaining in excess of 1 percent on Monday. Further, it is approaching its upper-end of the channel resistance placed at 10,290 which also happened to be the 61.8% Fibonacci retracement level of the recent decline (i.e. 10490-9960).
A successful breakout from the channel on healthy volumes can extend the current pullback to levels of 10430-10640 levels. However, failure to trade above 10290 can resume the corrective wave dragging the Index lower to levels of 10080-10000.
Technical oscillator such as the relative strength index or the RSI has turned upwards after taking support at the 40 level i.e. formed a higher low suggesting a temporary pause in the corrective wave and price has closed above the 200-DMA making room for more upside.
Moreover, a move above the 50 level can extend the short covering rallies in the coming trading sessions.
Here is a list of top three stocks which could give up to 17% return in the next 3-4 weeks:
On the daily chart, Capacite Infraprojects Ltd. (CAPACITE) is on the verge of a breakout from the channel pattern after taking support at the 127% Fibonacci extension level placed at 290 (as indicated on chart).
A sustained trade above 320 can trigger a breakout from the channel resuming the uptrend. On the weekly chart, the stock has turned upwards after forming a tweezers bottom suggesting bull trend reversal on cards.
Moreover, RSI formed a positive divergence with price affirming bullishness building up in the stock. The stock may be bought in the range of 306-310 for targets of 340-360, keeping a stop loss below 285.
Infibeam Incorporation Ltd: BUY| Target Rs170| Stop Loss Rs144| Return 12%
On the weekly chart, Infibeam Incorporation Ltd. (INFIBEAM) is on the verge of a breakout from a trend line resistance placed at 158. Breakout with healthy volumes can trigger a bull trend reversal.
Moreover, on the daily chart, the stock has witnessed buying on heavy volumes after taking support at the 78.6% Fibonacci retracement level suggesting further upside in the stock.
The RSI has turned upwards breaking out of the upper Bollinger Bands suggesting extended bullishness in the coming trading sessions. The stock may be bought in the range of 151-153 for targets of 164-170, keeping a stop loss below 144.
JB Chemicals & Pharmaceuticals Ltd: BUY| Target Rs365| Stop Loss Rs280| Return 17%
On the weekly chart, JB Chemicals & Pharmaceuticals Ltd. (JBCHEPHARM) has taken support at the 89% Fibonacci retracement level and turned higher. Further, a sustained trade above 320 can resume the uptrend taking it higher.
On the daily chart, the stock is on the verge of a breakout from a “W” pattern, the neckline is placed at 321 after forming a consolidation base around 280 levels. The stock may be bought in the range of 310-314 for targets of 345-365, keeping a stop loss below 290.
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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