A breakout above 11,850 levels can infuse a rally which could take the index towards 12,000-12,100 levels
The Nifty rallied for the second consecutive day in a row on June 26 and closed above the crucial level of 11,800. The BSE Smallcap and Midcap indices rose 0.47 percent and 0.85 percent, respectively.
The Nifty closes just a shade below 11,850 levels. Going forward, a breakout above 11,850 levels can infuse a rally, which could take the index towards 12,000-12,100 levels.
On the downside, supports are seen at 11,650-11,590 levels. In Nifty options, maximum Put open interest is seen at the strike price of 11,700, followed by 11,600. Maximum call open interest is seen at 12,000, followed by 11,800.
Here is a list of top three stocks that could return 10-15 percent in the next 3-4 weeks. The returns are calculated as of closing recorded on June 26:
Oberoi Realty: Buy| LTP: Rs 579| Stop Loss: Rs 540| Target: Rs 640| Upside 10%
The stock has been forming higher tops and higher bottoms since October low of Rs 351 on the weekly chart. It touched high of Rs 608 in April last month and then corrected towards Rs 487 levels.
The price bounced back to Rs 578 and then corrected to make a higher low of Rs 499. After moving back to the current levels, the stock has formed a double bottom pattern on the daily chart.
The pattern has taken support at its 100-days moving which is acting as a support and resistance for the stock. The Relative Strength Index (RSI) has given a positive crossover with its average on the weekly chart.
MACD line has given a positive crossover with its average and moved above the equilibrium level of zero on the daily chart. Thus, stock can be bought at current levels and on dips to Rs 558 with a stop loss below Rs 540 for the target of Rs 640 levels.
State Bank of India: Buy| LTP: Rs 358| Stop Loss: Rs 340| Target: Rs 400| Upside 11%
The stock has seen a major multi-year consolidation between levels of Rs 350 and Rs 150 odd levels for more than eight years. Last month, the stock witnessed a breakout from the base on strong momentum and good volumes indicating buying participation in the stock.
After three weeks of consolidation within the weekly long body bullish candle of May 24 has now resumed an uptrend. MACD line has given positive crossover with its average and moved above the equilibrium level of zero on the daily chart.
The Average Directional Index (ADX) line, an indicator of uptrend strength has moved above equilibrium level of 20 with rising Plus Directional line on the daily chart.
Thus, the stock can be bought at current levels and on dips towards Rs 351 with a stop loss below Rs 340, and a target of Rs 400 levels.
Voltas: Buy| LTP: Rs 653| Stop Loss: Rs 620| Target: Rs 750| Upside 15%
The stock touched an all-time of Rs 675 in December’17 and since then it has been in negative to sideways correction mode for the last 18 months.
It has formed a base between Rs 470 and Rs 675 odd levels and is now approaching breakout levels. The lows in the latter part of the base pattern have formed higher lows and long bullish bar indicating buying coming in at higher levels.
The price has given a breakout on the upside from Bollinger Band with the expansion of bands indicating the continuation of the trend in the direction of breakout on the daily chart.
The last couple of session has witnessed good volumes with positive price action indicating buying momentum. MACD line has given positive crossover with its average above equilibrium level of zero on the weekly chart.
Thus, the stock can be bought at current levels and on dips towards Rs 641 with a stop loss below Rs 620, and a target of Rs 750 levels.
(The author is Head of Technical and Derivatives, Sanctum Wealth Management)
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