F&O expiry could be in range of 10,200-10,400; 4 stocks which could give up to 11% return

F&O expiry could be in range of 10,200-10,400; 4 stocks which could give up to 11% return

The Nifty50 hit historic high in opening trade in Wednesday’s session and closed at historic levels of 10,295.35. The Nifty Bank rallied 4 percent on Wednesday session with strong volumes seen on charts, after the government announced Rs 2.11 lakh crore recapitalisation for PSU banks.

Technically, the Nifty has given a double bottom breakout last week only as mentioned in the earlier article and in the last session, the index broke again forming a bullish Flag pattern adding strong conviction of it heading towards 10,600.

For now, holding above 10250, we may see this rally to extend further towards 10,400 level in the near term. On the options front, 10,000 PE still holds highest open interest followed 10,200 PE, shifting support level at 10,200 and 10,300 CE has highest open interest on higher side followed by 10,400.

Derivative data suggests current month expiry may be expected in between 10,200-10,400 range. For now, we recommend holding current long in the index with a stop loss of 10,170 and any dip near 10,230 would be again buying opportunity.

For the short term, holding above 10,100 level, we may expect Nifty to march towards 10,400-10,600 levels.

Here is a list of four stocks which can give up to 11% return in short term:

United Breweries: BUY | Target Rs 1010| Stop Loss Rs 840| Upside 10%

The stock has given its first consolidation breakout in the beginning of the October month but it has not reacted technically. It saw some correction up to its strong support of Rs830.

On Wednesday, the stock has taken a breather and rose sharply with strong volumes suggesting momentum in the stock and can move towards Rs980 levels in the near term.

The stock is still trading well above all its strong DMA’s on the short and the long-term charts. The momentum indicator RSI currently has a reading near 68 which is considered being a bullish zone.

Considering above technical setup traders can accumulate the stock at current levels to any dip near Rs875 for the target of Rs 980 and Rs1,010 with a stop loss below Rs840 on a closing basis.

Berger Paint: BUY | Target Rs 310| Stop Loss Rs 255| Upside 11%

On weekly charts, the stock has given a decisive Cup and Handle pattern breakout with superb volume hinting it is ready to touch fresh highs.

On both daily and weekly charts, we can see two-three patterns such as the bullish flag and small downtrend channel breakout with strong volume that suggest current momentum in stock will last longer.

On the monthly charts, stock has given a box breakout, we just need to wait for monthly closing for further confirmation.

Considering above technical breakouts, traders can initiate buy call on the stock at current levels to any dip near Rs270 for the target of Rs310 and Rs350 with a stop loss below Rs 256 on a closing basis.

TTK Prestige: BUY | Target Rs 7000| Stop Loss Rs 6000| Upside 8%

The stock is trading in a strong uptrend since long and in the last two month, we have seen some correction in the counter which pulled it towards 6,000 levels.

On the weekly charts, the stock has taken support at 50-days exponential moving average and we have seen a strong pull back with volume recently.

If we study the weekly chart, the stock has broken from its bullish flag pattern and small downtrend channel pattern in this week with very good volumes suggesting it is ready to continue its overall trend.

On the daily chart, the stock opened with a gap up on Wednesday and sustained around higher levels the whole day. The momentum indicator RSI currently reading at 63 which is bullish zone.

Considering above technical evidence, Bonanza recommends a buy call on the stock at current levels to any dip near Rs6300 for the target Rs7000 and keep a stop out level below Rs6000 on a closing basis.

L&T Technology: BUY | Target Rs 870 | Stop Loss Rs 780| Upside 7%

The stock has not performed historically and we have seen continually lower lows on the counter, but now the stock chart is showing potential at current levels.

On the daily charts, the stock has broken through its long-term downtrend line with decent volume along with it has given double bottom breakout also which suggest some trend reversal is going to happen.

We can see positive divergence also in RSI and stock is trading above all strong DMA’s like 200-100 etc. Traders can take a position in the counter at current levels to any dip near 800 for the targets of 870 and stop out levels can be kept below 780 on a closing basis.

Disclaimer: The author is Senior Research Analyst, Bonanza Portfolio Ltd. The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.