Going ahead into a week with F&O expiry and overhang pressure from rising crude oil price along with weakening rupee, the index is likely to witness volatile trade setup in the coming session.
Dinesh Rohira
The Indian equity market remained volatile on the backdrop of weak macro factors coupled with negative momentum on the sectoral front.
The Nifty index breached its crucial support level of 10,500 on Wednesday and decisively slipped below 50-day EMA level placed at 10,460.
However, index took a strong support at this zone to rebound upward near its immediate resistance placed at 10,600 levels last week. The index ended on a flat note with 0.08 percent gain on weekly basis at 10,605 levels on Friday.
The index formed a bullish kind of a candlestick pattern on daily charts, and long lower shadows on the weekly basis. The weekly RSI stood at 55 levels indicating no divergence against price while MACD indicated bullish trend as it traded above Signal Line.
Going ahead into a week with F&O expiry and overhang pressure from rising crude oil price along with weakening rupee, the index is likely to witness volatile trade setup in the coming session.
With index retracing upward in the last two sessions, it might continue on upward momentum for a couple of sessions.
However, a profit-booking regime at higher level can't be ruled out, and thus we advise to trade with caution and strict stoploss. We maintain a rangebound trade on weekly basis with 10,750 levels on upside and 10,510 levels on the downside.
Here is a list of top three stocks which could give up to 8-18% return in the short term:
Jain Irrigation System Ltd: Buy | Target: Rs 123 | Stop-loss: Rs 94 | Return 18%
Jain Irrigation witnessed a series of correction after registering a 52-week high during the mid-January and broke below its crucial support level.
However, after a healthy consolidation near Rs 90 levels, the scrip made a positive momentum reversal in last week’s trade as it managed to close above its 100-200-days EMA levels placed at Rs 101 and Rs 95 respectively.
The scrip also witnessed a strong volume upsurge as it closed with about 6 percent gains on an intraday basis. The scrip formed a strong bullish candlestick pattern on its daily price chart indicating a reversal trend on its weekly price chart.
Further, a secondary momentum indicator witnessed a revival with weekly RSI level shifting upward from oversold-zone coupled with positive cue coming on MACD.
The support level for the scrip is currently placed at Rs 84 and resistance level from the upper band is placed at Rs 135. We have a BUY recommendation for Jain Irrigation which is currently trading at Rs 103.90
Just Dial Ltd: Buy | Target: Rs 575 | Stop-loss: Rs 480 | Return 13%
Just Dial continued with a positive momentum throughout the week despite a volatile broader market and retraced strongly after a making sharp correction near Rs 380 levels.
Further, it made a decisive breakout from its crucial resistance coming from its 50-days moving average and witnessed a robust volume growth, indicating a momentum buildup.
On the weekly price chart, after closing with about 9 percent intraday gains, the scrip made a solid bullish candlestick pattern, signaling a positive trajectory.
The weekly RSI level at 57 coupled with positive divergence on MACD indicates a buying regime at the current level. The scrip has a support at Rs 468 levels and resistance level at Rs 682. We have a buy recommendation for Just Dial which is currently trading at Rs 507.65
ITC Ltd: Sell | Target: Rs 250 | Stop-loss: Rs 285 | Return 8%
ITC continued to remain under pressure despite attempting to remain on a positive trajectory. The scrip broke below an important trend channel of Rs 282 in last week’s trade, and further, it slipped below the short-term moving average of 5-10-days level.
There was a negative signal from volume trend as it continued to consolidate. The scrip formed a solid bearish candlestick pattern on its weekly price chart after breaching below 10-days EMA level indicating a sustained pressure.
Further, the secondary momentum indicator continued to indicate negative signal with RSI slipping at 50s levels coupled with the bearish outlook from MACD trend.
The scrip is facing a resistance at Rs 296 levels and support at Rs 244 levels. We have a sell recommendation for ITC which is currently trading at Rs 272.30
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