Nifty likely to face resistance around 10,250; 3 stocks that could return 7-12%

Shitij Gandhi

After ending the October series on a negative note, the initial rollover data indicates short rollover to the November series.

The derivative data indicates bearish scenario to continue as Nifty has developed multiple strong resistances and is continuously making lower tops on technical charts.

On bounce, the Nifty is likely to face resistance around 10,250, 10,300, 10,400 spot levels. In the November option contracts, we are seeing options open interest building up in 10,500 calls and 10,000 puts.

From the options data, we saw the shifting of options range to the lower band which clearly reflects discomfort among bulls.

Overall data is currently running negative and we expect that 10,200-10,250 should act as a strong resistance moving forward.

At current level, traders should remain cautious on the buy side as once again selling pressure on higher levels may drag the index lower.

Here is a list of top three stocks which could give 7-12 percent return in the next 1 month:

Info Edge (India): Buy| Target: Rs 1,700| Stop loss: Rs 1,460| Return: 9 percent

In the recent past, the stock witnessed a hefty profit booking from Rs 1,680 and dropped down towards Rs 1,350 to test its 200-days exponential moving average on daily charts.

At the current juncture, the stock has given a fresh breakout above the symmetrical triangle pattern along with rising volumes which suggest more upside in the coming sessions.

Traders can accumulate the stock in a range of Rs 1,550-1,580 for the upside target of Rs 1,700 levels with a stop loss below Rs 1,460.

Gujarat Ambuja Exports: Buy| Target: Rs 261| Stop loss: Rs 220| Return: 11 percent

The stock has been consolidating in the range of Rs 180-230 from the last four months. In this month we have observed fresh breakout in the prices.

Currently, the stock has formed a bullish flag pattern on the daily charts and is on the verge of a breakout above the same.

The positive divergence on secondary indicators like RSI and stochastic also suggest for further upside in prices moving forward. Traders can accumulate the stock in a range of Rs 235-240 for the upside target of Rs 261 and a stop loss below Rs 220.

Sterlite Technologies: Buy| Target: Rs 393| Stop loss: Rs 325| Return: 12 percent

The stock made a double bottom pattern on the daily charts around Rs 275 and bounced back sharply thereon to surpass above its long and short-term moving averages.

The hefty volumes this week along with rising prices suggest that bullish momentum may likely to continue in coming sessions as well. Traders can accumulate the stock on dips around Rs 350-360 for the upside target of Rs 393 with a stop loss below Rs 325.

The author is a Senior Research Analyst, SMC Global Securities Ltd.