Though the Nifty managed to close above the resistance zone of 10,760-10,770, it has formed Gravestone Doji candlestick pattern on the daily chart which is a reversal pattern.
Ashish Chaturmohta
After a positive start, the Nifty hit a high of 10,851 on Monday, but most gains were erased in the last hour of trade. The index finally settled at 10,787, up 0.2 percent on Monday.
Though the Nifty managed to close above the resistance zone of 10,760-10,770, it has formed a Gravestone Doji candlestick pattern on the daily chart, which is a reversal pattern. The index needs to hold above 10,760 levels and let buying emerge for the market to rally towards 10,860-10,929 levels.
On the downside, if the Nifty trades below 10,760 it is likely to test 10,710-10,695 support levels. A break below this could take the index towards 10,550 levels.
In futures and options, maximum put open interest was seen at the strike price 10,600 followed by 10,700. The same for calls stood at 11,000. Put additions were seen at 10,800 and 10,700, while call unwinding was seen at 11,000 strikes.
Here is a list of 5 stock ideas that could return 9-17% in the short term:
United Breweries: Buy| CMP: Rs 1,275| Stop loss: Rs 1,230| Target: Rs 1,450| Return 13%
The stock had been in major consolidation phase over the last three years between Rs 1,230 and Rs 700 odd levels. On the long-term monthly chart, the stock has formed a bullish Cup and Handle pattern.
In addition to that, the handle formation is inverted head and shoulder pattern underscoring the bullishness of the whole technical chart structure.
The stock has seen a breakout from this pattern with strong momentum and good volumes to hit an all-time high of Rs 1,291 in Monday’s session.
The price has also given a breakout from Bollinger band with the expansion of band and closed above upper band suggesting the start of a fresh uptrend in the direction of the breakout.
The momentum indicators are in a bullish mode on short as well as on the long-term charts. Thus, the stock can be bought at current levels and on dips to Rs 1,260 with a stop loss below Rs 1,230 for a target of Rs 1,450 levels.
Maruti Suzuki India: Buy| CMP: Rs 9,022| Stop loss: Rs 8,750| Target: Rs 9,800| Return 8.6%
The stock is in an uptrend on the long-term weekly and monthly chart forming higher tops and higher bottoms. The stock hit a high of Rs 9,996 in the month of December last year and since then it has been in corrective phase to hit low of Rs 8,256.
The rally from this low has crossed falling resistance trend line connecting highs of Rs 9,996 and Rs 9,350. The price has also given a breakout from Bollinger band with the expansion of band and closed above upper band suggesting a trend to continue in the direction of the breakout.
The daily MACD has moved above the neutral level of zero and on the weekly chart, it has turned up after taking support at zero level. Thus, suggesting price correction is over and the uptrend is resuming.
The stock can be bought at the current level and on dips to Rs 8,920 with a stop loss below Rs 8,750 for a target of Rs 9,800 levels.
RBL Bank: Buy| CMP: Rs 541| Stop loss: Rs 510| Target: Rs 620| Return 14%
The stock has been trading sideways to negative between Rs 600 to Rs 450 odd levels for more than a year now. It formed bullish inverted head and shoulders pattern on the weekly chart and is currently trading at neckline/breakout level.
The price has given breakout from Bollinger band with the expansion of band and closed above upper band suggesting start if fresh uptrend in the direction of the breakout.
The stock has seen above average volumes in the last five sessions with a positive movement indicating buying participation in the stock.
Thus, current price structure and momentum is suggesting that the stock is likely to see a breakout on the upside. The stock can be bought at current levels and on dips to Rs 535 with a stop loss below Rs 510 and a target of Rs 620 levels.
Crompton Greaves Consumer Electricals: Buy| CMP: Rs 234| Stop loss: Rs 220| Target Rs 275| Return 17%
The stock touched an all-time high of Rs 295 in the month of January and then corrected down towards Rs 217 levels. For the last three-month, the price has been moving in a sideways range of Rs 245 to Rs 217 levels and seen consolidated at lower levels.
The stock has seen a bounce back from the lower end of the range on multiple occasions indicating strong support zone for the stock. Volumes have been above average during this consolidation suggesting accumulation at lower levels.
The Relative strength index has given positive crossover with its average on the daily chart. Thus, the stock can be bought at current level and on dips to Rs 230 with a stop loss below Rs 220 and a target of Rs 275 levels.
Godrej Industries Limited: Buy| CMP: Rs 617| Stop loss: Rs 585| Target: Rs 700| Return 13%
The stock has been in an uptrend on the long-term charts forming higher tops higher bottoms on long-term chart. For the last eleven months, the stock has been in a corrective phase trading sideways to negative between Rs 699 to Rs 512 levels.
The stock has seen a bounce back from Rs 550-512 zone on multiple occasions indicating as a strong support zone for the stock.
The weekly MACD has moved above neutral level of zero suggesting consolidation phase is over and the uptrend is resuming. The stock has moved above falling resistance trend line connecting highs of Rs 699 and Rs 646 on the weekly chart.
Thus, the stock can be bought at current level and on dips to Rs 607 with a stop loss below Rs 585 for a target of Rs 700 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.