Remain cautious till Nifty breaks above 10,640; 3 stocks which can give up to 12% return

Hadrien Mendonca

Nifty has been depicting confusing signs after rallying from lows of 10,150. Past few days have been completely range bound as the struggle for specific direction is clearly visible.

Bank Nifty on the other hand has broken out from a declining channel pattern for the first time since hitting all time high in January 2018. Heavyweights like HDFC Bank and IndusInd Bank are the top contributors to the breakout. However, the Pharma, FMCG and Metals stocks are losing strength as the week passes by.

Not forgetting, Nifty and Bank Nifty both continue to remain in the Lower Top Lower Bottom structure. Nifty is precariously poised above the 200-DMA of 10,100 while Bank Nifty too is managing to currently hold above its yearly mean of 24,500.

Hadrien Mendonca

Senior Technical Analyst|IIFL

• Nifty at a make-or-break point; top 3 stocks which could give up to 12% return

• Breakdown witnessed on Bank Nifty; 3 stocks which can give up to 10% return

• Crucial support seen at 10,910; 3 stocks which could give up to 10% return

The weak structure will be negated only when Nifty manages to break above 10,640 mark till then it is advisable to remain cautious with long positions. We expect the IT index to extend its outperformance further.

List of stocks that could deliver upto 9-12% returns

Quick Heal Technologies| Rating: Buy | Target Rs 335, Stop Loss 320 | Returns 9%

The stock has been under pressure for the past nine weeks and has finally broken out from a declining channel pattern on the daily chart. The decline was arrested as it found support around its long term 200-DMA.

The price breakout has also been accompanied with smart uptick in traded volumes.

In addition, Quick Heal has convincingly managed to hold above its short term averages too. We expect the stock to make a dash towards its potential target of Rs 335 levels in the medium term.

Future Retail | Rating: Buy | Target: Rs 610, Stop Loss 538 | Returns 11%

The stock has gone through constant selling pressure since hitting its all-time high of Rs 656 in November end 2017. The stock has been consolidating between a range of Rs 470-530 creating a Rectangular channel pattern. The recent strong upmove has finally aided Future Retail to breakout from this channel. Volumes have also been accompanied the strong upmove.

We expect the stock to move higher towards its potential target of Rs 610 in the medium term.

Eveready Industries | Rating: Buy | Target: Rs 443, Stop Loss 395 | Returns 8%

Six weeks of consolidation finally seems to be coming to an end as the stock has formed a Double Bottom formation and has staged a strong come back. The stock has witnessed constant rise in traded volumes. The recent move has also aided Eveready to move above the short term moving averages.

The stock has also witnessed a bullish Thee White Soldiers candle stick pattern on the daily chart further accentuating our bullish stance on the stock.