"The immediate resistance is seen at 10,850 levels. On the downside, the immediate support for the index is seen at 10,690 levels. Breaking below this level, the index may test 10,614 levels," says Ashish Chaturmohta, Head Technical and Derivatives at Sanctum Wealth Management.
Ashish Chaturmohta
Rally in equity markets continued with the Nifty closing at 10,739 levels on Monday, up 0.44 percent. The index has posted five straight weeks of gains. For April, it gained 6.2 percent to form a long bullish candlestick pattern on the monthly chart.
The Nifty has crossed and closed above the 61.8 percent Fibonacci retracement level of the entire fall from the high of 11,172 to a low of 9,952 levels. It has filled the falling gap area of 10,703-10,736 of February 5, clearing important hurdle levels.
The weekly moving average convergence divergence (MACD) has given a positive crossover, with its average after 12-weeks above the neutral level of zero. If the index manages to sustain at current levels, it could well test 10,910-10,940 levels which is also its resistance level.
Immediate resistance is seen at 10,850 levels. On the downside, immediate support is seen at 10,690 levels. Breaking below this level, the index may test 10,614 levels.
On the options front, maximum Put open interest (OI) stands at the strike price of 10,500 followed by 10,600. The 11,000 call has the highest open interest. Additions were seen in 10,500 and 10,600 Puts and 11,000 Calls, which suggests that the range for the market is shifting higher.
A decline in India VIX during April has been supportive for the market. For the last one week, it has been stabilising around 12 levels. Any rise from the current level of 12.36 could pause the market's ascend.
Here is a list of top 5 stocks that could deliver up to 19% return in the short-term:
Colgate Palmolive (India): Buy | CMP: Rs 1123 | Stop loss: Rs 1080 | Target: Rs 1250 | Return: 11%
On the long-term monthly chart, the stock has formed a bullish cup and handle pattern. The stock has been range bound for the past ten months between Rs 1,180-1,020 levels and is also seeing some bit of consolidation at all-time highs after rounding formation.
For the last three weeks, the stock has been moving in a sideways direction but with a positive bias. On Monday, the stock formed a long bullish candlestick pattern with good volumes suggesting that the price has resumed its uptrend.
The price has given a breakout from Bollinger bands. Now, with the expansion of bands suggest that the trend is likely to continue in direction of the breakout.
MACD has given a positive crossover with its average trending above the neutral level of zero suggesting resumption of the uptrend. Thus, the stock can be bought at current level and on dips to Rs 1,110 with a stop loss below Rs 1,080 and a target of Rs 1,250 levels.
Intellect Design Arena: Buy | CMP: Rs 199| Stop loss: Rs 190| Target: Rs 225-230 | Return 15%
In the month of February, the stock touched a 52-week high of Rs 205 and then corrected down towards Rs 162 levels. The rally in the stock was backed by high volumes but the recent decline was supported by below-average volumes which hints at bullish bias as buying participation was seen in stock on rallies.
At lower levels, the stock found support at previous lows and rallied back to its highs. The ADX line has been moving higher above neutral level of 20 which indicates strength in the uptrend.
Thus, the stock can be bought at current level and on dips to Rs 195 with a stop loss below Rs 190 and a target of Rs 225-230 levels.
Arvind: Buy| CMP: Rs 424 | Stop loss: Rs 403 | Target: Rs 475 | Return: 12%
The stock touched a high of Rs 479 in January and then corrected sharply to hit a low of Rs 361 levels. Subsequent bounce faced resistance at Rs 428 and then retested the low of Rs 361 to form higher lows.
The recent rally in the stock has formed a bullish double bottom reversal pattern on the daily charts. The ADX line has been moving higher above neutral level of 20 which indicates strength in the uptrend.
Stochastic has given a positive crossover with its average suggesting that it is starting a fresh uptrend after last week’s correction. Thus, the stock can be bought at current level and on dips to Rs 415 with a stop loss below Rs 403 and a target of Rs 475 levels.
Persistent Systems: Buy | CMP: Rs 808| Stop loss: Rs 780| Target: Rs 880 | Return: 9%
The stock touched a high of Rs 878 in February and then declined to hit a low of Rs 657 levels. The rally in the last couple of weeks was backed by good volumes which indicates buying participation.
It crossed 61.8 percent Fibonacci retracement of the whole decline. It has also cleared major falling gap zone of Rs 779 and Rs 734 levels.
The price has given breakout from the Bollinger bands. Expansion of bands suggests that the trend is likely to continue in the direction of the breakout. Thus, the stock can be bought at current level and on dips to Rs 800 with a stop loss below Rs 780 and a target of Rs 880 levels.
NCC: Buy | CMP: Rs 134 | Stop loss: Rs 125| Target: Rs 160 | Return: 19%
The stock touched its 10-year high of Rs 141 in January and then corrected swiftly towards Rs 102 levels. Sequent rallies from the low have faced resistance at Rs 133 odd levels.
The stock has formed an ascending triangle pattern on the daily chart and is currently trading at the breakout level. Relative strength index or the RSI and Stochastic have given a positive crossover with their respective averages suggesting the stock is likely to see a breakout on the upside.
Thus, the stock can be bought at current level and on dips to Rs 130 with a stop loss below Rs 125 for a target of Rs 160 levels.
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.