The breadth of the markets has not seen any major recovery and a breakdown of 11,350 levels on the downside could push further lower to 11,050 being the 50-Day average.
Nifty50 and Bank Nifty tested the higher band of resistance levels at 11,800 and 25,100 respectively and witnessed a sharp profit-taking with multiple news flow like geopolitical concerns between India-China added to the negative sentiments and new rules of margin implication with respect to the trading segment.
The Nifty50 has managed to hold on to 20-days average support line and retraced 50 percent of the entire fall to close above 11,500 levels over the past two days.
The breadth of the markets has not seen any major recovery and a breakdown of 11,350 levels on the downside could further push the index lower to 11,050 levels.
Bank Nifty is being trended in the range of 23,300-23,900 levels and awaiting the decisions of the Supreme Court with respect to the interest moratorium for either side breakout.
The trend continues to remain positive till 23,100 levels is not breached on the downside as the resistance of the previous months now would act as strong support from current levels.
Here is a list of the top three stocks which could give 10-12% return in the next 3-4 weeks:
Bharat Forge: Sell | LTP: Rs 491 | Target: Rs 430 | Stop Loss: Rs 524 | Downside: 12%
The stock has made a lower top on weekly charts and witnessed a sharp reversal with higher volumes and selling with negative divergence on daily charts.
The breakdown of short-term averages and RSI cutting downwards from the top would put pressure on the downside
We believe it will face resistance near its 200 week average of Rs 525 and it could be be a reversal point.The stock has completed its corrective action from the recent high of Rs 487 completing its 25.2 percent retracement (226-487) levels of the previous up move.
The daily RSI has also reversed upwards from the lower range and trading above the long-term average which indicates a bullish setup.
Multiple support levels in the range of Rs 405-415 levels would be protected and offer a good risk-reward ratio from current levels.
IGL: Buy | LTP: Rs 410 | Target: Rs 455 | Stop Loss: Rs 385 | Upside: 10%
The stock formed a double bottom at sub Rs 385 levels with strong volumes and has crossed its 50-day average confirming an up move. Its Relative Strength Index has crossed upwards from its lower band of averages and we expect the stock to outperform from current levels. The stock has completed his price and time-wise consolidation after a sharp down move from the highs of 534 levels.
(Vikas Jain, Senior Research Analyst at Reliance Securities)
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