Tata Elxsi and Colgate among 5 stocks that could return 8-14%

Ashish Chaturmohta

The market saw a gap-up opening but failed to sustain at higher levels and remained sideways for rest of the session on December 31. The Nifty closed flat for the day at 10,863.

However, the index closed 2018 with a gain of 3.15 percent after touching a lifetime high of 11,760 in August 2018.

The index has been forming higher highs and higher lows for the last four sessions. The Nifty managed to hold above 10,850 on December 31, and if it breaks below this level then we expect the index to decline towards 10,760-10,740 where next supports are seen. Below this, the next support is seen at 10,540.

On the upside, the market has overhead resistance zone of 10,940-10,985 which needs to be taken out for fresh breakout towards 11,089 and then 11,170.

In the Nifty options, the maximum open interest (OI) for Puts is seen at strike price 10,500 followed by 10,000. For Calls it is seen at strike price 11,200 followed by 11,000.

Put writing was seen at strike price 10,700 while Call writing was seen at 10,900, 11,000, 11300 and 11400.

India VIX increased 4.8 percent to close at 16. Now VIX needs to sustain below 16 for Nifty to clear its overhead resistance level, otherwise increase in VIX could lead to some profit booking in the market.

Colgate Palmolive: LTP: Rs 1,344| Stop loss: Rs 1,280| Target: Rs 1,500| Upside: 11 percent

The stock witnessed a decline from Rs 1,282 in May to a low of Rs 1,018 in October. Since then, the stock has seen a smart recovery from the strong support level of Rs 1,020 to touch a new all-time high of Rs 1,343.

It has formed a base between Rs 1,282-1,020 and has also given a breakout on the upside. The rally from the lows has been on strong momentum indicated by long body bullish candlestick and good volumes indicating buying participation.

The stock has been consolidating with gains above the previous high of Rs 1,282 for the last couple of weeks. The Relative Strength Index (RSI) and Stochastic have given positive crossover with their respective averages on the daily chart.

Thus, the stock can be bought at current levels and on dips towards Rs 1,320 with a stop loss below Rs 1,280 for a target of Rs 1,500.

L&T Technology Services: Buy| LTP: Rs 1,708| Stop loss: Rs 1,650| Target: Rs 1,900| Upside: 11 percent

The stock is in an uptrend forming higher tops and higher bottoms on the weekly chart. The price has rallied on high volumes and the correction was on below-average volumes which indicate buying participation in the stock.

The stock has been holding above the rising trendline connecting lows of Rs 1,156 and Rs 1,366. Also, the stock has been trading between Rs 1,800-Rs 1,366 for the last four months and formed symmetrical triangle pattern on the daily chart.

Currently, the stock is trading at the breakout level and is likely to see a breakout in the direction of major trend i.e. uptrend.

The momentum indicators are in a bullish mode on the daily and weekly chart. Thus, the stock can be bought at current levels and on dips to Rs 1,690 with a stop loss below Rs 1,650 and a target of Rs 1,900.

Crompton Greaves Consumer Electricals: Buy| LTP: Rs 228| Stop loss: Rs 215| Target: Rs 260| Upside: 14 percent

After touching a high of Rs 260 in August, the stock slipped towards Rs 190 in October. For the last four months, the stock has been trading in the range of Rs 234 to Rs 190 and formed a short-term rounding base pattern on the daily chart.

The price has been moving around 200-day moving average for the last couple of weeks and is consolidating around in the range of Rs 234 to Rs 220.

The RSI has given positive crossover on the daily chart suggesting price is likely to see a breakout on the upside. Thus, the stock can be bought at current levels and on dips to Rs 226 with a stop loss below Rs 215 and a target of Rs 260.

Tata Elxsi: Buy| LTP: Rs 1,020| Stop loss: Rs 970| Target: Rs 1,100-1,150| Upside: 12 percent

After touching an all-time high of Rs 1,491 in July, the stock witnessed a sharp decline to 922 in October. The stock price has taken support at previous congestion zone low of Rs 950-922 and seen a bounce back on multiple occasions.

The stock has been consolidating in a range of Rs 1,090 and Rs 922 and formed a base on the daily chart. The RSI has given positive crossover above its average on the daily chart.

Thus, the stock can be bought at current levels and on dips towards Rs 1,005 with a stop loss below Rs 970 and a target of Rs 1,100-1,150.

Page Industries: Buy| LTP: Rs 25,238| Stop loss: Rs 24,400| Target: Rs 27,300| Upside: 8 percent

The stock has been in a decline mode since it hit a high of Rs 36,370 in August to touch a low Rs 23,211 in December. On the daily chart, the price has formed a short-term bullish double bottom pattern.

The price and the RSI are showing positive divergence on the daily chart; i.e., the indicator is forming higher lows while the price is making lower lows.

Price has moved to 21-day exponential moving average on the daily chart. Stochastic has given positive crossover with its averages on the daily chart. Thus, the stock can be bought at current levels and on dips to Rs 25,000 with a stop loss below Rs 24,400 and a target of Rs 27,300.

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