'Don’t get carried by DLF rally, initiate shorts with target of Rs 144'

Ajit Mishra

Indian markets witnessed yet another volatile trading session on October 14 before ending with decent gains.

The Nifty closed 0.2 percent higher at 11,330 levels. The broader markets performed largely in line with the benchmark, with the BSE Midcap and Smallcap ending with gains of 0.4 percent and 0.1 percent, respectively.

Among the sectors, except IT that ended lower by 0.8 percent, all the other indices ended with healthy gains, with realty, auto and healthcare putting up the best show.

Ajit Mishra

VP & Senior Technical Analyst, Equity Research|Religare Securities

• Nifty50 to hover in 11,000-11,500 range next week; Avoid naked leveraged trades

The signs of trade tensions easing between the US and China has provided relief to investors globally. On the domestic front, the earnings season is likely to dictate trend for the Indian markets, as some of the front-liners will declare their results this week.

We expect that more than the earnings announcement, investors and traders will focus on the outlook provided by the management, especially for consumption-driven companies.

A list of top three stocks at could give 7-10% return in the next three-four weeks:

DLF Ltd: Sell Oct Futures| Target: Rs 144| Stop-Loss: Rs 162|Downside 7.7 percent

DLF has been trading in a broader range with the bias on the negative side. Though it has witnessed an intermediate rebound in between but it lacked sustainability.

In line with the past instances, it has again recovered and is now offering a fresh shorting opportunity to those who missed the chance earlier.

Bharat Electronics Ltd: Buy| Target: Rs 120| Stop-Loss: Rs 103|Upside 10 percent

After a sharp correction from its record high, BEL has been rebounding for the last eight months. After the marginal dip, it has recovered sharply on October 14 to close at 108.95 and formed a fresh buying pivot on the daily chart.

The current chart formation, combined with the positioning of indicators, is adding to the positivity. We advise initiating fresh longs in the levels of 107-109.

Godrej Consumer Products Ltd: Buy| Target: Rs 740| Stop-Loss: Rs 670| Upside 6.8 percent

Godrej Consumer Products has been gradually rebounding for the last one month, after testing its crucial support zone of 200-EMA on the weekly chart.

It is consolidating in a range and likely to post a breakout from the same. We advise not to miss this buying opportunity and accumulate within 688-693 zone. It closed at 690.70 on October 14.

(The author is VP Research, Religare Broking)