“Failure to trade beyond 10,735, could resume the downside correction in the Nifty, dragging it lower to 10,550-10,325 levels,” says Aditya Agarwala of YES Securities.
Aditya Agarwala
The Nifty bounced back sharply in the last three trading sessions after witnessing a similar correction last week. Following this upmove, the index is approaching its 61.8 percent Fibonacci retracement level placed at 10,735 levels. A sustained trade above this Fibonacci resistance can extend the upmove to 10,820-10,930 levels.
However, failure to trade beyond 10,735, i.e. its 61.8 percent Fibonacci retracement level, could resume the downside correction, dragging it lower to 10,550-10,325 levels. The index has entered into a volatile trading range, suggesting a rise in the volatility index in coming sessions which can lead to further choppiness.
The midcap and smallcap indices continue to underperform the headline index, leading to a divergence, confirming the view that the market could witness choppy trading in coming sessions.
Here is the list of stocks that can deliver 9-16 percent return in 3-4 weeks:
Nilkamal Ltd: Buy| Target: Rs 1,975| Stop loss: Rs 1,600| Return: 16%
On the weekly chart, Nilkamal Ltd. (NILKAMAL) has broken out from a consolidation channel and is approaching the upper end of the Triangle pattern placed at Rs 1,975 (as indicated on chart) indicating bullishness building up in the stock.
A sustained trade above Rs 1,730 with healthy volumes can take the stock to the upper end of the pattern placed at Rs 1,975. Further, on the daily chart, it has taken support at the 61.8% Fibonacci retracement level and turned upwards affirming bullishness.
Moreover, RSI has witnessed a range shift after taking support at the 40-level entering the bull zone affirming bullishness. The stock can be bought in the range of Rs 1,705-1,710 for targets of Rs 1,895-1,975, keeping a stop loss below Rs 1,600.
The New India Assurance Company Ltd: Buy| Target: Rs 790| Stop loss: Rs 690| Return 9%
On the daily chart, the New India Assurance Co. Ltd. (NAICL) has turned upwards after breaking out of a Triangle pattern suggesting bullishness dominant in the stock.
Further, it has broken out on healthy volumes affirming the bullishness. The RSI has turned upwards breaking out of the upper Bollinger Bands suggesting extended bullishness in the coming trading sessions.
The stock may be bought in the range of 720-725 for targets of 760-790, keeping a stop loss below 690.
Axis Bank Ltd: Buy| Target: Rs 600| Stop loss: Rs 519| Return 10%
On the weekly chart, Axis Bank Ltd. (AXISBANK) is on the verge of a breakout from an Ascending Triangle pattern suggesting bullishness building up in the stock.
Further, on the daily chart, it has turned upwards after taking support at the 50% Fibonacci retracement level placed at 520 and has broken out from a consolidation phase affirming bullishness.
The RSI has entered in the bull zone after bearing out of broken out from upper Bollinger Band. The stock may be bought in the range of 544-547 for targets of Rs 585-600, keeping a stop loss below Rs 519.
Disclaimer: The author Technical Analyst at YES Securities (I) Ltd. 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.