By Rohit Singre, Bonanza Portfolio Ltd.
The Nifty50 touched the strong support levels of 10,100 on Wednesday’s session due to heavy selling pressure but managed to give a quick bounce from the same.
The Nifty closed in red for the seventh consecutive session in a row. We have seen strong profit booking and selling pressure in the index from its strong resistance of 10500 levels.
On the intraday charts, the index has already reached its oversold zone, so we may expect a little pullback in an index but the short-term trend is still negative.
The Nifty bank has not seen much of correction compared to Nifty and took a halt above its previous breakout level of 25200 on Wednesday session.
Investors’ need to watch these levels carefully and any bounce from these levels will take Nifty Bank towards fresh highs.
On the derivative front, highest open interest shifted to 10500 CE which is previously at 10,000 PE followed by 10400 CE and on downside side 10200 PE have highest open interest followed 10000 PE so will act as support as of now in Nov series.
We have witnessed strong call unwinding and fresh short built up in the index as results index touched 10100 levels.
We recommend investors to keep a more stock specific approach rather than focusing too much on the index.
We recommend investors to use every rise in the market as shorting opportunity until trading below 10230. Strength in the index will be back once it will start sustaining above 10230 levels.
Here is a list of three stocks which can give up to 11% return in short term:
EIH: BUY | Target Rs 169 | Stop Loss Rs 143| Upside 11%
After a strong consolidation breakout recorded in late October, the stock is again trading in a range and maintaining above its breakout levels.
On the monthly chart, the stock has given an inverted ‘Head and Shoulder’ pattern breakout in late May and after that, we witnessed a Bullish Flag breakout around October-end.
In both the scenarios we have seen very good volume activity which suggest the stock is ready to touch previous high in near term.
Traders can take a position in the counter at current levels to any dip near 147 for the targets of 169 and a stop out levels can be kept below 143 on a closing basis.
Alkem Laboratories: BUY | Target Rs 2150| Stop Loss Rs 1900| Upside 8%
After touching a lifetime high of Rs2400, the stock started correcting and recent chart structure suggests that it is forming rounding bottom which is bullish in nature.
On the daily charts, we have witnessed some consolidation breakouts with strong volumes which suggest a bottom is formed and the stock is all set to move northwards.
On the daily charts, the stock is trading above its all strong DMA’s and the momentum indicators such as relative strength index (RSI) is reading currently at 64 which is bullish zone.
Considering technical setup, traders can accumulate the stock at current levels to any dip near 1950 for the target of 2150 and a stop loss below Rs 1900 on a closing basis.
Syngene International: BUY | Target Rs 560| Stop Loss Rs 480| Upside 10%
The stock has broken its double bottom pattern in late September and thereon it was consolidating above the breakout level.
The recent volume and price activity in the stock suggest that it is ready to act technically because failed to go below its breakout zone.
On the weekly chart, the stock has given a falling trend line breakout with good volume but not moved as expected. We expect the stock may move towards Rs 560 zone in near term.
Considering technical structure, traders can initiate buy call on the stock at current levels to any dip near 500 for the target of Rs 560 with a stop loss below Rs 480 on a closing basis.
Disclaimer: The author is Senior Research Analyst, Bonanza Portfolio 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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