10,900 will act as crucial hurdle in June expiry; 3 stocks which could give 5-11% return

Abhishek Mondal

Bulls tightened their grip on the Nifty on Tuesday. The index ended the session at 10,842.85, a gain of 0.52 percent, after US President Donald Trump and North Korea’s leader Kim Jong Un agreed to complete denuclearisation of the Korean peninsula.

Immediate support on the Nifty is placed around 10,698 (23.6 percent retracement of its March to May upmove) and 10,688 (20-day exponential moving average). 10,891 (76.8 percent retracement of its January to March downfall) will act as immediate resistance based on the daily chart.

The relative strength index (RSI) on the daily chart is placed at 63.32 which signifies a neutral zone with no divergence against the price. Moving average convergence divergence (MACD) is also trading above the zero line with a positive crossover, which indicates that the bias could remain bullish in the short term.

India VIX ended down 3.41 percent at 12.73. A decrease in VIX suggests limited downside and a consolidated upmove in the market.

On the options front, maximum call open interest of 43.61 lakh contracts is seen at the strike price of 11,000, followed by 10,900, which now holds 31.02 lakh contracts. Maximum put open interest of 50.69 lakh contracts is seen at the strike price 10,600, followed by 10,700, which now holds 46.48 lakh contracts.

As per options data, the support and resistance levels in Nifty has shifted higher compared to last week. Immediate support is seen around 10,700 and 10,600, whereas 10,900 and 11,000 will act as a hurdle before June expiry.

Here is a list of top 3 stocks that could return 5-11% return in the short term:

Havells India Ltd: Buy| Close: Rs 557.75 | Target: Rs 582 | Stop loss: Rs 535 | Return: 5.43%

In the daily scale, the stock has taken a support around its 200-DMA and bounced back with moderate volumes which suggest that the stock has made a temporary bottom around Rs 522 levels.

The key technical indicators Relative strength index (RSI) and MACD has turned upward and signaling limited downside in the stock whereas (+)DI trading above (-)DI. Based on the above observations Trader can buy the stock in dips around Rs 550-552 with a stop loss below Rs 535 (closing) for a target of Rs 582

Tata Sponge Iron Ltd: BUY | Close: 1119.80 | Target: Rs 1210 | Stop loss: Rs 1049 | Return: 8.81%

The stock has given a breakout from the symmetrical triangle pattern around Rs 1,109-1,110 on Tuesday on the daily chart with higher volumes.

A daily momentum indicator Relative Strength index (RSI) reading at 58.22 level, showing positive momentum and MACD trading above zero line with positive crossover whereas OBV — On Balance Volume is showing an upward momentum, which indicates that the stock has the potential to move higher. A trader can buy the stock on dips around Rs 1,110-1,112 with a stop loss below Rs 1,049 (closing) for a target of Rs 1,210

Trident Ltd: BUY | Close: 60.10 | Target: Rs 65.50 | Stop loss: Rs 56.50 | Return: 11%

In the daily scale, the stock has given a breakout above its downward trend line placed around 58.50-59 levels on Monday, which suggest bullishness in the stock.

A daily Relative Strength Index (RSI) showing upward momentum and MACD trading below zero line with positive crossover whereas (+) DI just crossover the (-) DI, which indicates that stock likely to move upward further.

A trader can buy the stock on dips and around Rs 58-59 with a stop loss below Rs 55 (closing) for a target of Rs 65.50.

Disclaimer: The author is Research Analyst, Guiness Securities. The views and investment tips expressed by investment experts 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.