The Nifty continued with the downward spiral in its daily chart for the third week in a row, indicating a slothful movement in an upcoming session.
Despite closing on a positive bias in Friday’s trade, Nifty failed to cohere above its psychological support level during the closing period of trade on the backdrop of selling pressure coupled with mounting concerns over NPA resolutions and GST implementation.
On the daily chart, Nifty formed a bullish candlestick pattern. A downward breakout from this crucial support level of 9,450 may drag Nifty at 9390 level.
However, if Nifty breaks past from its higher resistance level placed at 9,700, any breakout will give an upward momentum which could take the index towards 9,850-9,900 in the medium period.
The relative strength index (RSI) of Nifty currently stands at 43 which indicates a negative trend as Nifty started to trade below its support level. On the basis of EMA, the broad range for the week is seen from 9,350 on downside and 9,750 on the upside.
The sideways movement in upcoming session can’t be ruled given the confusion over the growth projection out of GST regime followed by aggressive stance by regulators on bad loans signalling a volatile ride.
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Bharat Gears Ltd: BUY| Target Rs165 | Stop Loss Rs130| Return 18%
Regardless of trading in a sideways direction for several trading periods, Bharat Gears has withheld with their upper circuit while limiting the downward breakout on the backdrop of volume support.
On the weekly basis, the stock was up by 1 percent, dragged by selling pressure in Tuesday’s trade. However, the stock rebounded back from its intraday low to close at positive trajectory thereon.
The technical outlook for stock suggests a strong upward trend with RSI at 57 which supports a buying regime at this price, while the MACD at 2.63 shows a crossover from its signal line which is at 2.33 indicating a bullish rally in upcoming sessions.
According to exponential moving average analysis, it indicates a strong uptrend with a major support level at 134 & 128 with upper resistance level at 152.
The inherent breakout from upper level is expected by a build up of a strong uptrend momentum which could take the index above Rs160 level.
We have a BUY recommendation for Bharat Gears which is currently trading at Rs139.20, with a target placed at Rs165 and a stop loss of Rs130.
Rain Industries Ltd: BUY| Target Rs135 | Stop-loss Rs105 | Return 16%
Rain Industries remained in a strong uptrend movement forming a series of rising peaks and troughs on the long term charts. The consolidation phase witnessed during the last week ended the bearish trend, thus forming a cup & handle pattern which suggests a bullish continuation price pattern.
On weekly basis, the stock gained almost 7 percent. On the technical front, the RSI stood at 66 as the price just started to trade above its resistance level signalling a buying sentiment. The MACD at 0.94 also suggests strong support for the rally as it crossover its signal line.
Further, based Moving Average the stock is currently at upward trend as price started to trade above its 20-days EMA. Being the price parity with previous up move in similar circumstances, the stock will face a crucial resistance at 125 and support level at 110.
The breakout from the upper circuit will see a next major movement in price at board range of 130-135. We have a buy recommendation for Rain Industries which is currently trading at Rs116.45, with a target price of Rs135 and a stop loss placed at Rs105.
Ambuja Cements Ltd: BUY| Target Rs280| Stop Loss Rs235 | Return 14%
Ambuja Cement retraced from its crucial support level after consolidating at 230 level for several trading sessions. With this uptrend momentum build on the backdrop of volume breakout, the stock started to trade at the bullish trajectory.
On weekly basis, the stock gained about 3 percent. On the daily chart, the stock formed a bullish reversal pattern which indicates an end of a downward movement. On the technical front, the RSI of stock stood at 59 which indicates price being traded above its resistance level.
Further on the basis of EMA, the stock is currently trading on positive bias where the immediate support level is seen at 244 just below its closing price, while the upper circuit will be resisted at 254 and 265 level. The breakout from the upper circuit is expected to build a leap momentum to trade around 270 level.
We have a BUY recommendation for Ambuja Cement which is currently trading at Rs245.50, with a target placed at Rs280.50 and a stop loss of Rs235.55.
ITC Ltd: BUY| Target Rs360| Stop Loss Rs310| Return 11%
After a muted moment in price and volume for almost of a month, ITC saw an upward reversal movement which contributed the broader index to close higher while the share recorded its intraday high.
On the weekly basis, ITC gained almost 2 per cent on the backdrop of Friday’s movements. Technically ITC is at uptrend with RSI at 58 indicating a price trading above its resistance level.
Based on Moving Average analysis, it suggests a strong support for upward movement as the price just got above its 20-day SMA. A major support level for the stock will be seen at 309 while the resistance level will be tested at a range of Rs340.
The possibility breakout from upper circuit level will support the next lag of upward trend. We have a BUY recommendation for ITC Ltd. which is currently trading at Rs323.65, with a target of Rs360 and a stop loss at Rs. 310.
PVR Ltd: SELL| Target Rs1330| stop loss Rs1440| Return 5%
The stock came under pressure with downward spiral since last week on the backdrop of mounting selling pressure which continued throughout the week to close at the negative trajectory.
On the weekly basis, the stock was down by 5 per cent despite gaining a marginal upward movement but failed to sustain at that level.
On the technical front, the stock is in negative trajectory indicating a further downward trend. The RSI of stock suggests a weak support at 37 with mounting selling pressure, which may extend if it fails to triggers any positive regime.
Further, the EMA and SMA indicates a weaker position, as the price started trading below its moving average price. The stock will be tested at the upper resistance level of 1435, while the support level will be seen at 1352.
Given the outlook of stock based on technical, it can’t be ruled out that the stock will witness a further breakout from its next support level.
We have a SELL recommendation for PVR Ltd. which is currently trading at Rs. 1408.55, with a target placed at Rs1330 and a stop loss of Rs1440.
Disclaimer: The author is Founder & CEO, 5nance.com. The views and investment tips expressed by investment experts on moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.[“Source-moneycontrol”]