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Top 5 stocks which could give up to 17% return based on technical factors

Here is a list of top 5 stock ideas which could give up to 17% return in the short term.
Apr 17, 2018 / 01:51 PM IST
 
 
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Ashish Chaturmohta

Domestic equity markets witnessed a negative opening on Monday following Syria concerns. But, rally in the latter half saw the Nifty posting eighth consecutive session of gain to close at 10528 levels up by 0.46% for the day.

However, the market breadth was slightly in favour of bears with 11:12 advance-decline ratio. For the day, the index has formed a bullish Marubozu candlestick i.e. almost no upper or lower shadow indicating bulls were in control of the session.

The Nifty50 has crossed 50 and 100 days moving average (DMA) which were earlier acting as resistance and price is sustaining them. Now sustaining above 10460 levels index can rally towards 10630 which is February month high and then 10705 levels where 61.8% Fibonacci retracement of the whole fall is seen.

In Nifty Call options, strike price 10700 has highest open interest calls suggesting as resistance for the market. On the downside, 10400 and 10300 strikes have highest open interest suggesting as a base for the market. Thus, support for the index is seen at 10460 and then 10350 levels.

Here is a list of top 5 stock ideas which could give up to 17% return in the short term:

Gujarat Ambuja Exports Limited: BUY | CMP Rs 282 | Stop loss Rs 264 | Target Rs 330 | Return 17%

The stock is in a long-term uptrend forming higher tops higher bottom patterns. After touching high of Rs 280 levels in the month of January stock went into sideways trading range as it consolidated gains over the next three months.

During this phase, volumes were below average suggesting market participants holding onto to the positions. On Monday, the stock witnessed breakout from this consolidation with strong price momentum and high volumes to close at new all-time of Rs 282 and start of a fresh uptrend.

The price has given a breakout from Bollinger bands. Expansion of bands suggests that the trend is likely to continue in the direction of the breakout.

MACD has moved above neutral level of zero suggesting a change of trend from sideways to higher. Thus, the stock can be bought at current levels and on dips to Rs 275 with a stop loss below Rs 264 and a target of Rs 330 levels.

Asian Paints Limited: BUY | CMP Rs 1,179| Stop loss Rs 1,140| Target Rs 1,260| Return 7%

In the last one-year, the stock has tested support level of Rs 1,090 on multiple occasions. The stock has seen a rally from this level in last three weeks. Also, on daily chart price has W-shaped pattern on daily chart over last three weeks.

On the weekly chart on Friday, the stock has given breakout from Bollinger bands with the expansion of bands suggesting the trend is likely to continue in the direction of the breakout.

Thus, the stock can be bought at current levels and on dips to 1165 with a stop loss below Rs 1,140 for a target of Rs 1,260 levels.

Arvind Limited: BUY | CMP Rs 426| Stop loss Rs 403| Target Rs 475 | Return 11%

The stock touched a high of 479 in the month of January and then corrected sharply to hit low of Rs 361 levels. Subsequent bounce back faced resistance at Rs 428 and then retested the low of Rs 361 to form a higher low.

The rally in last three weeks has formed bullish double bottom reversal pattern on daily chart. On Monday, the price witnessed a strong price momentum and high volumes to close at breakout level, suggesting the stock is likely to see a breakout on the upside.

The stock has given a breakout from Bollinger bands with the expansion of bands suggesting trend likely to continue in direction of the breakout.

Stochastic has given positive crossover with its average suggesting stock is starting fresh uptrend after last week’s narrow consolidation. Thus, the stock can be bought at current levels and on dips to Rs 415 with a stop loss below Rs 403 for a target of Rs 475 levels.

Edelweiss Financial Services Limited: BUY | CMP Rs 274| Stop loss Rs 260| Target Rs 310| Return 13%

The stock has been in long-term uptrend forming higher tops higher bottoms and touched all-time high of Rs 309 in the month of November last year.

The stock then corrected down to Rs 224 levels, retracing 38.2% of the major rally from low of Rs 82 in December 2016 to high of Rs 309. The stock has formed bullish double bottom reversal pattern on the daily chart at the support level and the price is at breakout levels.

Weekly Relative Strength Index has given positive crossover with its average after six months suggesting a change in trend. Daily MACD has moved above neutral level of zero suggesting the stock is seeing strength on the upside.

Thus, the stock can be bought at current levels and on dips to 270 with a stop loss below Rs 260 for a target of Rs 310 levels.

Voltas Limited: BUY| CMP Rs 647| Stop loss Rs 620| Target Rs 700| Return 8%

The stock is in long-term uptrend forming higher tops higher bottom patterns. After the run-up from February low of Rs 553 to Rs 650 levels, for last one-month stock has been consolidating below Rs 650 levels and formed the short-term base.

MACD has given positive crossover with its average above neutral level of zero suggesting a change of trend from sideways to up. Thus, the stock can be bought at current levels and on dips to Rs 640 with a stop loss below Rs 620 for a target of Rs 700 levels.

Disclaimer: The author is Head Technical and Derivatives, Sanctum Wealth Management. 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.
Moneycontrol News
first published: Apr 17, 2018 01:51 pm

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