"Nifty may find support around 10600 marks. If it fails to hold this mark, the index may witness a correction till 10,550 zone. Strong hurdle seen around 10,660 zones. Decisive trade above these levels would add momentum on upside," says Rajesh Agarwal of AUM Capital.
Rajesh Agarwal
The Nifty snapped its five-week winning streak on profit booking at higher levels and closed the May 4 week lower at 10,618.25, down 0.73 percent week-on-week (WoW). It has formed a 'Shooting Star' candlestick pattern around its 61.8 percent retracement level on the weekly scale, indicating caution at higher levels.
The index may find support around the 10,600 mark. If it fails to hold this level, the index may witness a correction till 10,550, or its 20-day exponential moving average (EMA). The relative strength index (RSI) (14) has given a negative cross down around the overbought zone, indicating continuation of its downfall in the near-term. A strong hurdle is seen around 10,660 levels. A decisive trade above these levels would add momentum on the upside.
The Nifty Bank outperformed benchmarks and closed higher by 0.97 percent on a weekly basis. On the daily chart, post breakout from a bullish reversal pattern (inverse head and shoulder), the index is consolidating above its major 100 day simple moving average (SMA) which stands around 25,360 levels. It is facing a hurdle around its 50 percent retracement levels at 25,630 levels. Sustenance trade above these levels would further momentum on the upside.
Its moving average convergence divergence (MACD) is trading around zero and on the verge of a positive crossover, which is bullish set-up. The Nifty Bank may continue its rally till 26,450 levels, which might work as a stiff hurdle zone.
Here is a list of top five stocks that can deliver up to 15% return:
ICICI Bank | Rating: Accumulate | Target: Rs 310, stop loss: Rs 265, Return: 10%
ICICI Bank: (Closing: Rs 282.85) on weekly time frame is consolidating around upward sloping trendline. Multiple bullish reversal candlestick patterns around support zone is indicating accumulation of stock at current level. Furthermore, Money Flow Index is trading around oversold zone. Accumulate ICICI Bank around Rs 280-282 with stop loss at Rs 265 for target of Rs 310.
Bharat Electronics | Rating: Buy | Target: Rs 145, stop loss: Rs 120, Return: 12%
Bharat Electronics Limited (Closing: Rs 129.60) is trading around 61.8 percent retracement level (Drawn from low of 93 to high of 193) on weekly time frame. It has formed 'Hammer' candlestick pattern which is a bullish reversal pattern. Hammers signala capitulation by sellers to form a bottom accompanied by a price rise, to indicate a potential reversal in price direction.
Furthermore, Indicators like RSI (14) & MACD are trading around oversold zone with positive divergence. Buy BEL around Rs 128-129 with stop loss at Rs 120 on closing basis for target at Rs 145.
Bharat Petroleum Corporation | Rating: Accumulate | Target: Rs 415, stop loss: Rs 360, Return: 9%
BPCL (Closing: Rs 380.20) is consolidating between 50 & 61.8 percent Retracement levels on weekly time frame. On shorter time frame, BPCL has formed 'Tweezer Bottom' candlestick pattern with positive divergence in Oscillators suggesting a pullback from lower levels cannot be ruled out.
Accumulate BPCL around Rs 378-380 with stop loss at Rs 360 on closing basis for target at Rs 415.
Federal Bank | Rating: Buy | Target: Rs 115, stop loss: Rs 93, Return: 15%
Federal Bank: (Closing: Rs 100.05) post breakout from a range, is consolidating within a narrow range of Rs 95-102 zone. On daily chart, Federal Bank has closed above its major moving average of 100 SMA i.e. Rs 99.60 zone which is indicating prices to move higher till Rs 107 and Rs 117 zone. Furthermore, MACD has given positive crossover on weekly scale which is a bullish setup. Buy Federal Bank around Rs 99-100 with stop loss at Rs 93 on closing basis for target of Rs 115.
Jindal Steel & Power | Rating: Accumulate | Target: Rs 260, stop loss: Rs 228, Return: 8%
Jindal Steel & Power (Closing: Rs 240.65) on daily time frame is trading around its 'Internal Trendline' and its major moving averages. Till it sustains above this trendline, Jindal Steel should move higher from current level.
Furthermore, on hourly chart, Stock is trading around lower band of Descending Channel. Accumulate Jindal Steel around Rs 238-240 zone with stop loss of Rs 228 on closing basis for target of Rs 260.
Disclaimer: The author is Head of Research at AUM Capital. 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.