Podcast | Stock picks of the day: Cipla among 3 stocks which could return 14-17%

Manav Chopra

As per momentum oscillators, the market has entered deeply oversold levels, at these levels fresh shorts are not suggested as the risk-reward would not be favourable right now.

The levels of 10,150-10,200 might act as a cushion on further declines. If the market faces any support at these levels we may witness a relief rally up to 10,500-10,600 levels.

The same is expected in BankNifty, instead of taking a fresh short position one should try to exit from shorts if BankNifty stabilizes 23,900-24,000 might act as a cushion for further decline.

On weekly charts, RSI is nearing long-term bullish support levels of 40. Historically, these levels have been good support in the bull market and even in the bear market these level generally leads to mean reversion rally.

We expect Nifty to mean revert towards critical moving averages which are placed around 10,700-10,800 levels (200-DEMA placed around 10,779).

Here is a list of top three stocks which could give 14-17% return in the next 1-2 months:

Axis Bank: LTP: Rs 568| Target: Rs 650| Stop Loss: Rs 530| Return 14%

The recently Axis Bank has broken out of the long-term triangle on the weekly charts, which is now retesting its earlier resistance levels.

These levels are now likely to act as strong support. One can buy Axis Bank from these levels as the structure is bullish and the risk reward is favourable. Investors can initiate buy with a target at Rs 650 while a stop loss can be placed at Rs 530.

UPL: Buy| LTP: Rs 598.20| Target: Rs 700| Stop Loss: Rs 560| Return 17%

UPL has recently formed a Morning Star candlestick pattern on the weekly charts, which is now nearing its monthly support levels. Supports are placed around Rs 550 - 565 levels.

One can take a long position in UPL while keeping a stop loss below Rs 560 levels, and a short-term target can be maintained at Rs 700 levels

Cipla: LTP: Rs 634.55| Target: Rs 730| Stop Loss: Rs 610| Return 15%

Cipla is currently holding its monthly breakout levels and the momentum oscillators are showing bullish signs. In this volatile market, one should focus on pharma stocks.

The recent dip should be taken as buying opportunity in Cipla, for the short-term target can be maintained at Rs 730 levels while placing a stop loss below Rs.610.