The Nifty50 which closed above its crucial psychological level of 10,300 last week registered gains of over 2 percent for the week ended April 6th.
Benchmark indices staged a strong pullback rally fuelled by firm global cues. Broader markets outperformed the Nifty Midcap and Smallcap indices rose over 2 percent, each last week.
Sectorally, all indices ended in the green led by metal and PSU banking stocks. The Nifty has corrected by about 11 percent from February peak 11,172 and found support from 52-week EMA 9,980.
“Going ahead, we expect the Nifty to extend consolidation towards 10,450 and form a base in the broad range of 10,450 – 9,950, which would pave the way for the next leg of upmove,” ICICIdirect.com said in a report.
“As we are entering the Q4 earnings season, we believe the focus will shift to stock specific action amid ongoing consolidation,” it said.
The Nifty, in the last week, witnessed the continuation of the short-term pullback that had originated from sub-10,000 levels in the penultimate week. However, experts feel that it would be wise to use pullback rallies to short the index.
The pullback has done descent retracement of the previous fall and has now reached a crucial resistance zone i.e. 10,300-10,350. There are multiple parameters, lying over there, to restrict further upside.
“The Nifty, after the recent bounce back, has reached the hurdle zone of 10,300-10,350. The weekly as well as the monthly chart, however, shows that the index is not yet out of the woods and the larger outlook remains in favor of the bears,” Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas told Moneycontrol.
“Thus, I would recommend using the bounce as an opportunity to align oneself with the larger downtrend. So the strategy would be to stay on the short side of the trade,” he said. One can look to build a short position at the current level and add to it as the Nifty breaches 10,200 on the downside with 9,950-9,800 as targets in sight.
Here is a list of top 10 technical trading ideas which could give up to 11% return in the short term:
Analyst: Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in
Raymond Ltd: BUY| Target Rs1097| Stop Loss Rs947| Return 11%
In the recent correction, this counter has taken support around 200-days moving average (DMA) as it slipped into a multi-week consolidation phase.
Now, inside this consolidation phase, it has formed a double bottom around Rs890 levels on the line chart and it appears that the stock has embarked on an uptrend after consolidation breakout.
Hence, sustaining above Rs950 levels, this counter can be expected to hit a target of Rs1097 levels in the near term. Hence, positional traders are advised to go long on the stock for the said target with a stop loss below Rs947.
NIIT Technologies : BUY| Target Rs973| Stop Loss Rs867| Return 7.7%
After registering a lifetime high of around Rs1012 levels in turbulent market conditions in the month of March, this counter slipped into a corrective and consolidation phase before hitting a bottom at around Rs820 levels.
Since then after a brief pause of 4 sessions on Friday, it appears to have resumed its uptrend. As the long-term trend is strong and the counter has made a new lifetime high recently, it should now retest those highs on the resumption of the rally.
Hence, traders should buy into this counter for an initial target of Rs973 and a stop loss below Rs867.
United Spirits Ltd: BUY| Target Rs3600| Stop Loss Rs3250| Return 8%
After registering a multi-week consolidation this counter appears to be on the verge of a breakout as it witnessed a gap-up opening in Friday’s session.
The momentum in this counter shall further get strengthened on a close above Rs3,330 kind of levels. Hence, in anticipation of a breakout positional traders should create a long position for a target of Rs3,600 levels with a stop of Rs3,250.
Analyst: Dinesh Rohira, Founder & CEO, 5nance.com
Gravita India Ltd: BUY| Target Rs192 | Stop-loss Rs165 | Return 10%
After a steep decline from levels of 187 to 145 in the past trading sessions, Gravita India made a decent rebound in last week’s trading despite the weak market breadth.
The scrip decisively broke out above its 50-days EMA level to form an uptrend channel on its weekly chart, and witnessed a strong volume growth to support uptrend.
Despite failing to hold Friday’s high level placed at 178, the scrip formed a strong bullish candlestick pattern on its weekly price chart coupled with bullish crossover just happening at MACD and Signal Line.
Further, weekly RSI level moved towards 61 level indicating a positive sentiment. The support level for scrip is currently placed at 162 and resistance level from the upper band at 197. We have a buy recommendation for Gravita India which is currently trading at Rs. 173.95
Nath Bio-Genes Ltd: BUY| Target Rs574 | Stop-loss Rs530 |Return 6%
Nath Bio-Genes witnessed a strong consolidation around 419-411 levels. Over a period of time, it made a strong rebound in last week’s session.
The stock bottomed out at 411 levels. On the daily price chart, the scrip made a solid bullish candlestick pattern coupled with reversal trend on its long-term chart.
The RSI at 67 indicates a price which is just trading above its resistance level and showing a good signal to enter. The scrip is currently facing a resistance at 583 levels and the support level is placed at Rs498. We have a BUY recommendation for Nath Bio-Genes which is currently trading at Rs. 542.30
Adani Transmission Ltd: SELL | Target Rs170 | Stop Loss Rs184 |Return 5%
Adani Transmission continued to consolidate on its weekly price chart after making a short-term breakout in the previous session, but it failed to sustain the momentum.
The scrip witnessed a sustained selling pressure to breach below its crucial EMA levels placed at 191 levels coupled with weak volume trajectory, indicating a negative sentiment for the scrip.
The scrip formed a strong bearish candlestick pattern on its weekly price chart suggesting a negative momentum in coming session.
Further, the secondary momentum indicator continued to indicate negative signal with RSI at 37 levels which is still above oversold zone coupled with weak support from MACD trend.
The scrip is facing a resistance at 191 levels and support at 160 levels which will remain crucial for scrip. We have a SELL recommendation for Adani Transmission which is currently trading at Rs. 178.85.
Brokerage Firm: Karvy Stock Broking
Asian Paints Ltd: BUY| Target Rs1202| Stop Loss Rs1100| Return 5%
Asian Paints Ltd has been trading with a bullish momentum along with the other consumption stocks. The counter has been one of our preferred picks for the coming week in the mentioned space.
After forming a base around 1080-1100 levels, the counter is on the verge of taking the northward move with increasing number of trading volumes. On oscillator front, the 14-day RSI is placed in the comfort zone of 55-60 levels, indicating further room in its upside surge.
On the other hand, the stock is also trading well above its major moving averages, signaling bullishness in the counter to continue in the near term.
Even the Bollinger band (20, 2) is facing in the northwards direction with a burst in the volatility on the daily charts, expanding towards 1180 plus levels.
The overall chart structure looks positive for short-term perspective with increasing number of price volumes action in the last two weeks. We expect the counter to swift higher in the coming sessions towards 1202 levels with the stop loss placed below 1100 in the April series
Container Corporation of India Ltd: BUY| Target Rs1330| Stop Loss Rs1220| Return 5%
Container Corporation of India Ltd (CONCOR) gave a positive return of around 1.33% during the just concluded week, whereas the broader index i.e. Nifty50 gave a return of around 2% in the same time frame.
The stock is trading above its 21-DEMA on the daily charts. The volume witnessed in the stock is also decent. The 14 period RSI is trading above the 9-period averages on the daily chart and is pointing northwards, supporting our bullish view in the counter.
The Parabolic SAR is also trading below the price on the daily chart, reiterating our bullish biases in the counter. Hence, we recommend going long in the counter around the current levels with the stop loss placed below 1220 for the target of 1330.
Dabur India Ltd: BUY| Target Rs356| Stop Loss Rs334| Return 4%
Dabur India Ltd gave a positive return of around 4% during the just concluded week, whereas the sector index i.e. NIFTY FMCG gave a return of around 2.60%. The stock outperformed the sector index and is likely to continue to do so in the coming trading sessions as well.
The stock is also trading above its 21/50/100/200-DEMA on the daily charts and weekly charts, suggesting strength in the counter in the shorter time frame. Adding to it, the stock is trading with notable volumes, reiterating our bullish biasness in the counter.
On the indicator front, the 14-period RSI already gave a positive crossover with the 9-day signal line, suggesting further upside in the stock. The Parabolic SAR is also trading below the price on the daily chart, reaffirming further upside in the counter.
Considering all the above points, we recommend Smart Traders to go Long in the counter around the current levels for an upside target of 356 levels, keeping a strict stop loss placed below 334 mark.
Hexaware Technologies Ltd: BUY| Target Rs420| Stop Loss Rs388| Return 3%
Hexaware Technologies Ltd managed to settle the week on a positive note with a positive return of more than 8%. Adding to that, the stock closed well above all its major moving averages (21/50/100) on the daily and weekly chart with positive price structure, suggesting uptrend in the stock is likely to continue in the coming week also.
On oscillator front, the 14-period RSI gave a positive crossover with 9-days signal line on the daily chart and poised with a bullish bias, reflecting strength in the counter.
The MACD gave positive crossover where stochastic is also suggesting positive divergence, reflecting strength in the up move.
From the above observation of price momentum, it seems the stock is likely to trade with positive bias and may move higher towards the psychological mark of 420 levels continuing the recent trend.
Hence, we recommend short-term traders to go long in the stock with the stop loss placed below 388 for the higher target of Rs420 levels.
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.