Top 10 technical picks for Muhurat Trading which can return up to 40% in Samvat 2074

“With a broader view certainly ‘Yes’; the ‘Bull Run’ is likely to continue, but if we have to consider slightly smaller picture then we are still a bit sceptical about it. We continue to believe that the market needs to have some kind of breather to maintain the higher degree sturdy structure,” Sameet Chavan, Chief Analyst- Technical Derivatives, Angel Broking Pvt Ltd told Moneycontrol.

“It sounds a bit contrarian as one would always have a counter-argument saying we are at record highs and there is no negative development around us. Technically speaking, if we closely observe price movement since the beginning of August, the index has done nothing,” he said.

We have already witnessed a couple of price shocks after hitting record highs on previous two occasions and the index is more or less back to same levels.

Chavan further added that there has been a series of divergences in weekly ‘RSI-Smoothened’ and considering its historical performance; we certainly do not want to neglect it.

Here is a list of top 10 stocks which could give up to 40 percent return in Samvat 2074:

Analyst: Jay Purohit, Technical & Derivative Analyst at Centrum Broking

SBI: BUY| Target Rs315| Stop Loss Rs230| Return potential 29%| Holding 3 months

The largest public sector bank (SBI) has drastically underperformed the broader market in recent past. However, the stock is taking support at around 38.20 percent retracement level (Rs250) the entire up move from Rs145 to Rs314.80 on the monthly chart.

At the same time, we are witnessing a formation of Bullish Harmonic Pattern called ‘Bullish Shark’ on the daily chart. The Potential Reversal Zone of the mentioned pattern is placed at Rs242 – Rs247 levels.

The ‘200 EMA’ on the daily chart also coincides with the mentioned PRZ. Since the momentum oscillators are showing initial sign of reversals on the daily and weekly chart, we advise our clients to buy the stock at current levels and on declines to Rs240 for a target of Rs295 and Rs315. A stop-loss for the trade should be placed at Rs230 on a closing basis.

Divi’s Laboratories: BUY| Target Rs1165| Stop Loss Rs770| Holding 3-4 months| Return potential 32%

The stock had given a breakout from the ‘Inverse Head & Shoulder’ pattern on the daily chart and rallied sharply. Both trading and deliverable volumes were quite high in the recent up-move, indicating more of a buying interest among market participants.

However, in the last couple of weeks, the stock is going through a corrective phase and hovering around the 38.20 percent retracement levels of the recent up-move, which also coincides with the support of ‘Super Trend’ indicator on the daily chart.

Also, we witnessed a positive crossover of ’50 DEMA’ with ‘200 DEMA’, which is known as ‘Golden Crossover’. These Golden and Death crossovers have shown their significance in past too.

Hence, we are expecting history to repeat itself again and thus expecting a rally towards Rs1100 - Rs1165 levels in coming months. Thus, we advise traders to buy the stock at current levels and on dips to Rs845 with a stop-loss of Rs770 on closing basis

Reliance Industrial Infra Ltd: BUY| Target Rs700| Stop Loss Rs460| Holding 3-4 months| Return Potential 34%

The stock is moving in a sideways direction on the monthly chart. The consolidation phase of last two years has resulted in the formation of a ‘Triangle’ pattern on weekly chart.

Recently, the stock had given breakout from the mentioned pattern and managed to sustain above the same. The breakout was supported by healthy volumes, which further validates the breakout criteria.

We witnessed similar breakout in May 2014 and the stock rallied sharply after that. Considering the positive placement of ‘RSI’ oscillator along with a set of moving averages on the weekly chart, we are expecting Rs640 – Rs700 levels in coming months.

Thus, any decline towards Rs490 levels would be a buying opportunity for the stock. Thus, we advise traders to buy the stock with a stop-loss of Rs460 on a closing basis.

Just Dial: BUY| Target Rs610| Stop Loss Rs340| Holding 4-6 months| Return 43%

Last few years were not good for the stock as it continued to make monthly lower lows. Recently, the stock has made low around the previous swing low and made a ‘Hammer’ on the monthly chart.

The momentum oscillator ‘RSI – Smoothened’ and ‘MACD’ are showing initial sign of reversal on the weekly chart and thus there can be a possibility of a ‘Double Bottom’ pattern formation on the weekly chart.

At the same time, the consolidation of last four months has resulted in the formation of an ‘Inverse Head & Shoulder’ pattern on daily chart. The ‘neckline’ of the mentioned pattern is placed around Rs430 levels.

Since, the ‘Super Trend’ indicator, which is a trend the following study, is placed positively on the daily chart, we are anticipating medium term reversal in the counter.

Thus, clients are advised to accumulate the stock at current juncture and on declines to Rs380 for the target of Rs565 – Rs610 with a stop-loss of Rs340 on a closing basis.

Parag Milk Foods: BUY| Target Rs350| Stop Loss Rs235| Holding 3-4 months| Return 30%

Post the listing in May 2016, the stock has rallied by around 50 percent within three months. However, the stock has started correcting and taken support in the zone of 200 – 205.

Last week, the stock gave breakout from the ‘Falling Trend Line’ and managed to sustain above the same. Volumes were also healthy on the breakout, which is a positive sign for the counter.

Also, the momentum oscillator ‘RSI - Smoothened’ and ‘MACD’ are placed positively on both daily and weekly chart and thus indicating strength in the counter.

Considering above technical evidence, we are expecting a continuation of the ongoing momentum towards Rs330 - Rs350 levels in coming quarters.

Thus, we advise traders to buy the stock at current juncture and on declines to Rs253 with a stop-loss of Rs235 on a closing basis.

Brokerage Firm: Prabhudas Lilladher

Arvind: BUY| Target Rs450| Return potential 12.5%

Arvind Ltd has taken support several times at Rs350 levels on the daily chart. After a recent corrective move to a low Rs358, the stock has bounced back above a cluster of moving averages.

The stock is also now sustaining above it which implies that it is ready for an up move, this is supported by - Rising RSI (49) having a lot of scope for an up move, constant high volume, Improvement in PDI, and MACD set to get in positive. We have a positive view on this stock for the projected target of 450.

Bharat Electronics: Target Rs210| Return potential 22%

Seeing the long-term daily chart, this stock has been in a strong trend, making a higher top higher bottom formation. The 200-DMA value lies at Rs150 levels, which makes a favorable risk-reward ratio.

RSI also showing signs of reversal after the corrective move. Considering all these observations, this stock would make a new high as per Fibonacci projection of Rs210 with a decisive cross of previous high of Rs181 levels.

Berger Paints: BUY| Target Rs300| Return potential 14%

This stock has made a good base at Rs240 levels and has got into a trend with rising RSI, positive MACD, PDI crossing over MDI.

This stock has resistance at Rs275 levels a decisive cross of Rs275 makes it ready to make a new high for a target of Rs300 as RSI on the weekly chart is valued at 58 implying momentum to set in for target Rs300. We have a bullish view on the stock.

Century Plyboards: BUY| Target Rs320| Return potential 15%

After correcting from the Rs315 levels, the stock has taken support several times at 200-DMA from whereby it has bounced back.

Supported by rising RSI from the oversold zone and good volume participation, it has a favorable risk-reward ratio to buy for the target Rs320 and a stop loss of Rs230.

LIC Housing Finance: BUY| Target Rs780| Return potential 16%

This stock has corrected from the Rs780 levels to make a low of Rs604 and now RSI being on the rise, we observe a positive divergence on RSI, implying the completion of correction.

Also, the stock is sustaining above the 200-DMA and the stock is ready to rise towards the previous high of Rs750-780. The stock witnesses a trendline breakout. We have a bullish view on this stock.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their 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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