The Nifty50 closed flat with a positive bias for the week ended May 25 above its crucial resistance level of 10,600. It was indeed a roller coaster rise for Nifty which rebounded nearly 200 points after hitting a low of 10,417 to close the week at 10,605 on Friday.
The Nifty50 is now trading above its 5-DEMA, 50-DEMA and 100-DMA which is a bullish sign; however, bulls will only be able to take control once Nifty closes above its recent top of 10,929 formed on May 15, 2018.
The first half of the week looked very ominous as we saw index sliding below the important psychological level of 10,500. Investors are advised to remain stock specific and square of long positions on rallies.
Now, the biggest question is whether markets are done with the correction or this is just a temporary bounce back?
“In our sense, recently there was a massive stock specific destruction seen in the market and in this course of action, so many individual counters entered an extremely oversold territory. Hence, some kind of breather was overdue in these names,” Sameet Chavan, Chief Analyst, Technicals, and Derivatives at Angel Broking told Moneycontrol.
“The last couple of days rally was mainly a short covering move in these beaten down counters. It may continue also for a while but we believe that this is just a short-term breather and at higher levels index is likely to face resistance in the zone of 10,650 – 10,720,” he said.
Chavan further added that for the first half in the forthcoming week, the ideal strategy would be to focus on individual stocks and look to liquidate positions at higher levels. On the lower side, the immediate support is seen in the range of 10,560 – 10,500.
Here is a list of top 12 trading ideas by experts which could give up to 6-20% return in the short term:
Analyst: Sameet Chavan, Chief Analyst, Technicals, and Derivatives at Angel Broking
Bajaj Finserv Ltd: Buy| Target: Rs 6,700| Stop loss: Rs 5,715| Return 17%
This counter has been enjoying a multi-year bull run for the last four years. There has been no major correction seen in this course of action, which is quite remarkable.
We can witness a series of breakouts in the ongoing bull run. More importantly, most of the breakouts are accompanied by a substantial rise in volumes, indicating strong buying interest at all-time highs as well.
We recommend buying on a minor dip towards Rs 6,000 for a near-term target of Rs 6,700. Traders can keep their stop losses below Rs 5,715.
MCX Ltd: Buy| Target: Rs 900| Stop loss: Rs 765| Return 10%
After a long consolidation, the stock has finally managed to burst through its recent congestion zone. Recently, several attempts to surpass the Rs 800 mark turned unsuccessful; but this time, there was a decisive breakout seen with humongous volumes.
When such price and volume activity happens after a consolidation phase, the stock prices generally have a tendency to continue this momentum without giving a major dip in the coming days.
Hence, one can look to go long around Rs 805 for a target of Rs 900 by following a strict stop loss placed below Rs 765.
Balrampur Chini Ltd: Buy| Target: Rs 84| Stop loss: Rs 64| Return 20%
Of late, we have been quite persistent on this stock, expecting a possibility of a decent short-term bounce back after forming a base around the Rs 60 mark.
Last week, the stock prices traversed the upper end of the small ‘falling Wedge’ pattern around 65. After seeing some volatile moves, the stock is now poised for a healthy relief rally towards 84.
On the weekly chart, the stock prices confirm their strength by giving a close above the ‘5-EMA’ for the first time in last six months.
In addition, the ‘RSI-Smoothened’ is on the verge of giving a positive crossover well inside the oversold territory. One can look to go long for a target of Rs 84 by following a strict stop loss below Rs.64.
Analyst: Rajesh Palviya, Head – Technical & Derivatives Analyst, Axis Securities
Tata Elxsi: Buy| CMP: Rs 1,232.75| Target: Rs1,318| Stop loss: Rs 1,180| Return 7%
Since the start of this month, Tata Elxsi was in major consolidation mode within Rs 1,223-1,137 band on the daily chart. It gave a breakout at Rs 1,223 levels and is sustaining above the same.
The stock is also sustaining above its 20-day SMA which supports the bullish sentiments ahead. On the volumes front, the stock has witnessed a significant rise around breakout level indicating increased participation on the rally.
Both daily and weekly strength indicator RSI along with the momentum indicator Stochastic are in a bullish territory and are sustaining above their reference lines which signals strength and upward momentum in price.
Thus, taking into consideration the above factors, the maximum upside can be expected to Rs 1,300-1,318.
Berger Paints: Buy| CMP: Rs 296.30| Target: Rs 318| Stop loss: Rs 287| Return 7%
The most prominent observation on the price chart of Berger Paints is that the entire consolidation underway since January 2018 till date has taken the shape of a “Rounding Bottom” formation on the weekly chart.
The stock has given a breakout at 282 levels and sustaining above the same. The stock is forming higher top higher bottom formation on daily chart indicating sustained uptrend.
The daily and weekly RSI and Stochastic are in positive territory along with positive crossover indicating strength ahead. This breakout is accompanied with high volumes indicating increased participation.
The stock is also sustaining above its 20, 50 and 100 day SMA which signals a bullish trend in near term. We expect this stock to scale up further towards Rs 314-318 levels.
Radico Khaitan: Buy| CMP: Rs 441| Target: Rs 470| Stop loss: Rs 425| Return 6%
The stock has witnessed a pullback rally from its multi-week support of Rs 386. Since January 2018, Radico Khaitan was in major consolidation mode within Rs 440-320 band on the weekly chart.
It gave a breakout at Rs 440 levels and is sustaining above the same. The stock is also sustaining above its 20-day SMA which supports bullish sentiments ahead.
On the volumes front, the stock has witnessed significant rise around breakout level indicating increased participation on the rally.
Both daily and weekly strength indicator RSI along with the momentum indicator Stochastic are in bullish territory and sustaining above their reference lines which signals strength and upward momentum in price. Thus, taking into consideration the above factors, the maximum upside can be expected to Rs 464-470.
Analyst: Vikas Jain, Senior Technical Analyst Reliance Securities
Capital First (CMP: 557): Buy | Target: Rs 620| Stop Loss: Rs 535| Return 11%
The stock has retraced 61.8% of prior upmove (from Rs 346 to Rs 902), where its medium-term moving average worked as the key reversal point.
The stock has closed at 8 days’ high and with the sector in focus, it is expected to outperform, going forward. The key technical indicators remain bullish mode, which signals strength in the stock.
Kajaria Ceramics (CMP: 549): Buy | Target: Rs 589-610 | Stop Loss: Rs 515| Return 11%
The stock ended on a positive note after 2 weeks of consecutive decline, where its long-term rising trend line has supported the reversal. Convergence in RSI rise signals an overall positive trend. In case of any decline, its 200-week average will continue to work as key reversal point.
United Spirits (CMP: 3250): Buy | Target: Rs 3,550 | Stop Loss: Rs 3,060| Return 9%
The stock reversed after taking the support of prior multiple lows and rose to a 10-day closing high. The reversal in key technical indicators from their oversold zone signals a bullish trend reversal. In case of any decline, recent swing low will work as the key reversal point.
Analyst: Dinesh Rohira, Founder & CEO, 5nance.com
Jain Irrigation System Ltd: Buy | Target: Rs 123 | Stop-loss: Rs 94 | Return 18%
Jain Irrigation witnessed a series of correction after registering a 52-week high during the mid-January and broke below its crucial support level.
However, after a healthy consolidation near Rs 90 levels, the scrip made a positive momentum reversal in last week’s trade as it managed to close above its 100-200-days EMA levels placed at Rs 101 and Rs 95 respectively.
The scrip also witnessed a strong volume upsurge as it closed with about 6 percent gains on an intraday basis. The scrip formed a strong bullish candlestick pattern on its daily price chart indicating a reversal trend on its weekly price chart.
Further, a secondary momentum indicator witnessed a revival with weekly RSI level shifting upward from oversold-zone coupled with positive cue coming on MACD.
The support level for the scrip is currently placed at Rs 84 and resistance level from the upper band is placed at Rs 135. We have a BUY recommendation for Jain Irrigation which is currently trading at Rs 103.90
Just Dial Ltd: Buy | Target: Rs 575 | Stop-loss: Rs 480 | Return 13%
Just Dial continued with a positive momentum throughout the week despite a volatile broader market and retraced strongly after a making sharp correction near Rs 380 levels.
Further, it made a decisive breakout from its crucial resistance coming from its 50-days moving average and witnessed a robust volume growth, indicating a momentum buildup.
On the weekly price chart, after closing with about 9 percent intraday gains, the scrip made a solid bullish candlestick pattern, signaling a positive trajectory.
The weekly RSI level at 57 coupled with positive divergence on MACD indicates a buying regime at the current level. The scrip has a support at Rs 468 levels and resistance level at Rs 682. We have a buy recommendation for Just Dial which is currently trading at Rs 507.65
ITC Ltd: Sell | Target: Rs 250 | Stop-loss: Rs 285 | Return 8%
ITC continued to remain under pressure despite attempting to regain on a positive trajectory. The scrip broke below an important trend channel of Rs 282 in last week’s trade, and further, it slipped below the short-term moving average of 5-10-days level.
There was a negative signal from volume trend as it continued to consolidate. The scrip formed a solid bearish candlestick pattern on its weekly price chart after breaching below 10-days EMA level indicating a sustained pressure.
Further, the secondary momentum indicator continued to indicate negative signal with RSI slipping at 50s levels coupled with the bearish outlook from MACD trend.
The scrip is facing a resistance at Rs 296 levels and support at Rs 244 levels. We have a sell recommendation for ITC which is currently trading at Rs 272.30.
Disclaimer: 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.