"Reversal of downtrend will be seen once Nifty starts to trade above 10,640 levels on a sustainable basis. On the downside, immediate support is seen at 10,360 and then at 10,300 levels," says Ashish Chaturmohta, Head Technical and Derivatives, Sanctum Wealth Management.
By Ashish Chaturmohta
Sanctum Wealth Management
The markets got off to a strong start to the week with Nifty logging in 1.9 percent gain to close at 10,421 levels on Monday. Positive cues from the US after better than expected jobs data boosted sentiment in global markets also helped the sentiment on D-Street.
For the day, the index has formed a long bullish candlestick pattern indicating sustained buying interest through the day. The Nifty respected the long-term 200-day moving average (DMA) and seen a bounce back from the average.
The index closed at a cluster of short-term resistance zone of 10,410-10,450 levels. Crossing and sustaining above this on tradable basis index is likely to rally towards 10,640 levels which is recent congestion zone high.
In the Nifty Call options, strike prices 10600 followed by 10,500 have highest open interest suggesting which is likely to act as resistance for the market.
Thus, reversal of downtrend will be seen once index starts to trade above 10,640 levels on a sustainable basis. On the downside, immediate support is seen at 10,360 and then at 10,300 levels.
While 10,155 becomes the key level to watch on the downside; breaking below this will see a resumption of downtrend and selling pressure to intensify.
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Kotak Mahindra Bank Limited: CMP Rs 1101| Stop loss: Rs 1060| Target Rs 1200| Return 9%
The stock has been trading sideways for last five months between Rs 980 and Rs 1120 odd levels. Recently stock witnessed bounce back from the lower end of this range to touch high of Rs 1110 levels.
Since then the price has been sideways to negative in a small range to form bullish flag pattern on daily chart. After yesterday’s positive movement stock is showing is signs of breakout on the upside.
Despite fall in the market stock is trading just three percent off its all-time high indicating strength in the counter. Price has been forming higher lows indicating buying coming in at higher levels.
Stochastics has given positive crossover with its average suggesting change in short-term trend to the upside. Thus, the stock can be bought at current levels and on dips to Rs 1090 with a stop loss below Rs 1060 for a target of Rs 1200 levels.
KPIT Technologies Limited: CMP: Rs 218| Stop loss: Rs 205| Target: Rs 260| Return 19%
On the long-term monthly chart, the stock has formed a major W-shaped pattern between Rs 230 and Rs 190 odd levels and currently trading at the upper end of the pattern. The stock has been consolidating in a range of Rs 225 and Rs 190 odd levels for the last couple of months.
Thus, suggesting the stock is poised for a major breakout on the upside. Stochastics has given positive crossover with its average. MACD has given positive crossover with its average and moved above neutral level of zero suggesting the start of fresh up trend.
The 50-day moving average has offered support on declines and can be kept as a stop loss for long positions. Thus, the stock can be bought at current levels and on dips to Rs 213 with a stop loss below Rs 205 for a target of Rs 260 levels.
Network18 Media & Investments Limited: CMP: Rs 54| Stop loss: Rs 50| Target: Rs 65| Return 20%
The stock touched high of Rs 64 levels in January and then declined down to Rs 47 odd levels. For the last five weeks stock has been consolidating between Rs 47 to Rs 53 levels and formed the short-term base.
On Monday, the stock witnessed breakout from the base with strong price momentum and high volumes suggesting buying participation and reversal of downtrend in the stock.
Price has also given breakout from Bollinger bands with the expansion of bands suggesting price is likely to move in direction of the breakout. The stock has moved above long-term 200-day moving average which was acting as resistance for the stock and closed above it.
Thus, the stock can be bought at current level and on dips to Rs 53 with a stop loss below Rs 50 for target of Rs 65.
Jubilant Foodworks Limited: CMP: Rs 2084| Stop loss: Rs 2010| Target: Rs 2300| Return 10%
The stock has been in an uptrend since mid-2017 forming a higher top higher bottom on its daily chart. On January, the stock hit an all-time high of Rs 2331 and then corrected down to Rs 1950 levels.
The recent decline in the stock has been on low volumes suggesting market participants holding on to the counter. The stock has been holding above 50 days moving average which has acted as support in the past.
The recent correction has largely halted around a previous all-time high of Rs 1960 and the price has been consolidating above it in a narrow range for last one month.
Daily MACD has given positive crossover with its average and turned up from the neutral level of zero. Thus, the stock can be bought at current level and on dips to Rs 2060 with a stop loss below Rs 2010 for target Rs 2300 levels.
Voltas Limited: BUY| CMP: Rs 639| Stop loss: Rs 610| Target: Rs 730 | Return 14%
The stock touched high of Rs 675 on December 2017 and then witnessed decline down to Rs 555 levels. The fall corrected 61.8 percent Fibonacci retracement of the rally from Rs 495 to Rs 675 levels.
The price has formed a double bottom pattern on daily chart. For last three weeks, the stock has witnessed good volume action suggesting buying participation in the stock. The price has crossed and sustaining above 61.8 percent Fibonacci retracement of the fall from Rs 675 to Rs 552 levels.
Thus, the stock can be bought at current level and on dips to Rs 630 with a stop loss below Rs 610 for a target of Rs 730.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.
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