Profit Booking likely from 10,300-10,350; 4 stocks which are likely to give up to 17% return

In a coming week, Nifty has an immediate resistance near 10285 above which the next resistance comes near 10400.

Aditya Agarwal

Head Technical Research | Way2Wealth Brokers Pvt Ltd

• Profit Booking likely from 10,300-10,350; 4 stocks which are likely to give up to 17% return

• Profit booking likely at 10300-10350; ICICI Bank, Tata Motors DVR top picks: Aditya Agarwal

• Markets to move in the range of 9850-10080; 4 stocks which could give up to 11% return

Last week, Indian markets saw lethargic movements during the initial part of the week. However, bulls came into action during the second half of the week and drove the Nifty sharply higher to register a fresh all-time high of 10,191.90 and finally closed with weekly gains of 1.88 percent.

Due to a sharp surge in last week, the weekly bearish engulfing pattern formed on September 22, 2017, got void. Looking at the weekly chart, Nifty broke the upper band of its trading range and trade BSE Sensex went tad above its previous all-time high of 32,686.

However, the breakout of Nifty will be confirmed once the BSE Sensex too decisively crosses and sustains above its previous all-time high.

On a daily chart, the RSI (14) has confirmed its breakout from bearish divergence trend line.

In a coming week, Nifty has an immediate resistance near 10,285 above which the next resistance comes near 10,400.

On the flip side, 10,050 / 9,930 are the immediate support. Options data also indicate towards immediate resistance of 10,300-10,400 levels.

In last 2 trading session, fresh call writing was seen in both these strikes whereas on the lower side put writing at 10,200-10,100 strike option will act as strong support for indices in short term.

Here are the lists of 4 stocks which could return up to 17% in short-term:

ICICI Bank: BUY Around 271 – 268| Target 300| Stop Loss Rs255| Time frame 15 to 21 sessions| Return 10%

Looking at the weekly chart, stock corrected sharply after posting a high of 315. In that pessimism, stock registered a low of 264 during last week.

The level of 264 coincides with the previous resistance zone and last week stock rebound sharply from those levels. Also, the 61.8% retracement of its entire move from the bottom of 239 to 315 comes at 264 and last week stock precisely hit those levels.

The short-term momentum indicator on the weekly chart has entered inside the oversold territory. The Higher Top Higher Bottom formation on the weekly chart is still intact.

Thus, we recommend traders to buy this stock in a range of 271 to 268 with a price target of 300 and stop loss placed at 255.

Torrent Power: Buy Above 237| Target Rs285| Stop Loss Rs206.50| Time frame 15 to 21 trading sessions| Return 17%

Looking at the weekly chart, the stock has consolidated since past few months and formed a Symmetrical Triangle pattern.

During last week, the stock has seen the sharp rally and penetrated the upper band of the triangle pattern. The volume activity has also picked up which is a bullish indication.

The weekly RSI (14) once again entered inside the 60 levels. The daily 9-45 EMA is positive indicating that the current trend is up. Hence, we advocate traders to buy this stock above 237 with a price target of 285. A strict stop loss should be placed at 206.50.

Federal Bank: Buy Around 122.50 - 121, Target 140, Stop loss 115, Time frame 15 to 21 trading session| Return 12%

Looking at the daily chart, stock broadly consolidated in a range and formed an Inverse Head & Shoulder pattern on daily chart.

Yesterday, stock confirmed its breakout from said pattern and hit a fresh all-time high of 125.20. The said move was also supported by a rise in volume activity.

The weekly Bollinger Band which contracted sharply in past has started expanding indicates a shift in volatility.

Considering the above evidence, we recommend traders to buy this stock in a range of 122.50 to 121 with a price target of 140 and stop loss placed below 115.

Tata Motors DVR: Buy Around 243.50 – 242.50, Target 266, Stop loss 230, Time frame 15 to 20 trading session| Return 8%

Tata Motors DVR has formed an Ascending Triangle pattern and yesterday it confirmed its breakout by breaching the horizontal trend line resistance of 243.The daily RSI (14) has eventually entered inside the 60 levels.

On a monthly chart, the stock has surpassed its previous month candle which is a Doji pattern occurred near the lower band of its range. Short term traders can initiate long positions on dips with targets of Rs266 and stop loss of Rs230.