The support level for the index now gets upgraded to 26,500. The Nifty is approaching its crucial hurdle of 10,800.
Hadrien Mendonca
It turned out to be a stunning futures and options (F&O) expiry session on Thursday as indices registered handsome gains. Option writers ran for cover as short covering in index futures and out of the money call options lifted the Nifty and the Bank Nifty higher.
In our last week’s article, we had mentioned that the Bank Nifty had resumed its uptrend and the current move has confirmed the same.
In fact, Thursday’s rally has seen the Bank Nifty breakout from a classic Cup and Handle pattern on the smaller timeframe chart, which indicates that the current rising trend would extend further.
As per our projections, the Bank Nifty has the potential to rallying towards 27,500 levels.
The support level for the index now gets upgraded to 26,500.The Nifty is approaching its crucial hurdle of 10,800. A break above the resistance would also lift the Nifty towards 10,920 levels.
Here is a list of top three stocks that could deliver up to 8-11% return in the short-term:
IDFC Bank: Buy| Target: Rs 45| Stop loss: Rs 39| Returns 11%
After falling sharply in the past three quarters, the stock is finally showing some signs of the base building at the current juncture. In fact, IDFC Bank has also formed a double bottom formation.
In addition, clear divergence is visible on the relative strength indicating a fresh up move is on the cards. We expect the stock to rally towards its potential target of Rs 45 in the medium term.
L&T Technology Services (LTTS): Buy| Target: Rs 1,436| Stop Loss: Rs 1,275| Returns 8%
The stock had broken out from a Symmetrical Triangle pattern on the daily chart in the previous week and is sustaining above the same. The 50-DEMA is proving to act as a strong support every-time the stock fell sharply.
Given the consolidation post breakout, we expect the momentum to extend further in the coming weeks. The medium-term target is expected at Rs 1,436 levels, translating into 8 percent returns.
Coal India Ltd: Buy| Target: Rs 319| Stop Loss: Rs 283| Returns 8%
The stock has been consolidating for the past four months and has finally broken out from a Rectangular Channel pattern on the daily chart.
The breakout has been accompanied with a smart uptick in traded volumes. In addition, another oscillator also indicates that the current momentum is likely to extend further.
Disclaimer: The author is Senior Technical Analyst, IIFL. 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.