Nifty may head above 11,000 towards 11,320; top 5 stocks which can give 5-10% return

Rudra Shares and Stock Brokers

The much awaited Interim Budget presented on February 1 has hem in positive slant.

Macro factors far and wide seem quite affirmative and indicators too look appealing for the market ahead. Having said that, comments stated thereon (in the proposed Budget) is expected to bring in a pre-Lok Sabha election rally in the next couple of weeks.

CAD expectations in September to reach above 3 percent, is now slated to be seen at 2.5 percent. Also, the government has revised the Gross Domestic Product (GDP) target to 7.1 percent from 6.7 percent earlier for FY18.

Moreover, Goods and Services Tax (GST) collection for the month of January was at extreme peak of 1.02 lakh crore. Besides all these achievements, the proposed budget has brought in a set of relief for the middle income and rural group as well.

Furthermore, relaxation to the real estate sector is also commendable. Therefore, we remain positive on the real estate, FMCG, banking, cement, paint sector and other consumption based sector.

However, the fiscal deficit target revised from 3.1 percent to 3.4 percent for FY20 can be said to be manageable, as farmers relief package has been put in place and accounted for particularly.

Although, if we adjust the stated farmers relief package then fiscal deficit below 3.3 percent and 3.1 percent for FY19 and FY20 could have been achieved easily.

Overall interim Budget presented was quite populist, as per our expectations. Besides, government have maintained the fiscal deficit target within the limit at 3.4 percent for FY19.

Also, Interim Budget would help benefit 30-40 crore of people in the rural areas, specifically to the small farmers and to the middle class as well. Aftermath winning chances of current government in the Lok Sabha elections looks quite high.

For the coming week, also 10,980-11,000 range will remain a challenging zone for bulls. But the technical structure is suggesting that the resistance is getting weaker every time and we could surpass it in days to come and in that case a big move towards 11,320 and 11,500 will not rule out. On the other hand support for the week exist at 10,701 and 10,580.

Option data also suggesting 10,700 as immediate short term support as 10,700 put option holds maximum cumulative open interest of around 29.7 lakh contract while on the call side 11,000 strike price holds highest cumulative open interest of approximately 31.5 lakh contract.

Setup suggesting that bears should be highly cautious as panic short covering might results in sharp rally if 11000 level taken out decisively.

Here are the top stock trading ideas which can give good returns in the near term:

Havells India | Buy | CMP: Rs 737.15 | Target: Rs 796 | Stop Loss: Rs 700 | Return 8%

The stock has given triangle breakout and trading at new 52-week high. Long bullish candle has formed on daily chart. Momentum indicators are trading in bullish zone. Squeezed bollinger band is now opening up after a phase of consolidation and the price is tagging above upper band indicating the fresh trend is in making.

On weekly chart stock has taken support at 20-week moving average and bounced back. Hence, long positions can be created with short term perspective.

Tata Motors | Buy | CMP: Rs 181.65 | Target: Rs 199 | Stop Loss: Rs 169 | Return 10%

The stock has been in a prolonged downtrend but first sign of reversal has emerged on monthly chart. Bullish doji candlestick pattern has formed at the support range and the stock seems to be bouncing back after testing 2011 lows.

On weekly chart stock has went sideways with positive divergence indicating that short term bounce is expected. On daily chart stock has started trading above 20-day moving average and long positions can be initiated for a short term gain.

Kajaria Ceramics | BUY | CMP: Rs 549.75 | Target: Rs 588 | Stop Loss: Rs 519 | Return 7%

The stock has been in a continuous uptrend and recent small correction has taken a form of bullish flag formation. Stock seems to resuming the ongoing uptrend after testing 20-day moving average.

On weekly chart RSI has started trading in a bullish zone after a long time and we could see much higher levels in coming days. Also the stock is trading above all major moving averages and can be bought for short term gains.

Coal India | Sell | CMP: Rs 223.9 | Target: Rs 212 | Stop Loss: Rs 231 | Return: 5%

The stock is forming lower tops and lower bottoms for the past few weeks and last week it breached the important support levels on monthly chart. RSI has also entered in negative zone. On daily chart stock is resuming downtrend after testing 20-day moving average and RSI has also formed bearish reversal pattern.

Momentum indicators in all time frames are favoring the bears and we can expect the fall to continue is coming days. Hence short positions can be created for short term gains.

Disclosure: Rudra or its research analysts, or his/her relative or associate do not have any direct or indirect financial interest nor any other material conflict of interest at the time of stock recommendation, in the subject company. Also, Rudra or its research analysts, or his/her relative or associates does not have actual/beneficial ownership of one percent or more securities of the subject company. 

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