The Bulls are making their way back into D-Street but it will still be hard for the index to reclaim Mount 10K in a hurry due to the presence of multiple resistance levels
Kshitij Anand
Moneycontrol News
What a week! The bulls managed to push the Nifty50 back above 9,900 but bears dragged it back near 9,800 on Friday. The Nifty50 closed with gains of 1.3 percent for the week ended August 18.
The coming week will have four trading sessions as the market will remain shut on Friday for Ganesh Chaturthi.
The Bulls are making their way back into D-Street but it will still be hard for the index to reclaim Mount 10K in a hurry due to the presence of multiple resistance levels. The larger consensus view among technical chartists is consolidation in markets.
“The chart structure on a medium time frame (weekly) has been distorted due to previous week’s corrective move. And the way ‘RSI-Smoothened’ has shaped up, we are of the opinion that the market would face strong resistance at higher levels and it would be a challenging task to surpass the 10000 mark,” Sameet Chavan, Chief Analyst- Technical and Derivatives, Angel Broking told Moneycontrol.
“On the downside, the Nifty is likely to slide towards the daily ’89 EMA’, placed in the vicinity of 9670 – 9620. This view would probably be supported by the banking index as we would expect underperformance from this space to continue in the forthcoming week as well,” he said.
The Nifty is expected to remain within a range of 9950 – 9620 for a while. Chavan advises traders not to trade aggressively in such kind of market. It would be a prudent approach to focus on individual stocks with a proper exit strategy, he said.
The volatility has also increased last week. Despite the intermediate Nifty pullback from 9,700 to 9,950, India VIX remained above crucial resistance of 14 percent which remains a concern for any extended profit booking.
In Nifty the Call writers were active at 10,000 strikes which have not let the index to come close to this level and it slipped again.
"We expect some consolidation near 9,800 levels in the coming week. Despite recent profit booking the high Put base at 9,800 can lead to this consolidation," Amit Gupta of ICICIdirect told Moneycontrol.
Here is a list of top 5 stocks which can give up to 14% return in the short term:
Brokerage: SMC Global
Aptech Ltd: BUY| Target Rs260| Stop Loss Rs205| Time 1-2 months| Return 13%
The stock closed at Rs229.30 on 18th August 2017. It made a 52-week low at Rs105.40 on the 19th August 2016 and a 52-week high of Rs250.75 on 14th February 2017. The 200-days Exponential Moving Average (EMA) of the stock on the daily chart is currently placed at Rs193.01
The stock was trading in lower highs and higher lows sort of “Continuation Triangle”, which is bullish in nature.
Moreover, the stock has given the breakout from the pattern by registered gains over 11 percent in last week and also closed above the breakout levels so, buying may continue for coming days.
Therefore, one can buy in the range of Rs220-224 levels for the upside target of Rs250-260 levels with a stop loss below Rs205.
Speciality Restaurants: BUY| Target Rs135| Stop Loss Rs105| Time 1-2 months| Return 14%
The stock closed at Rs117.95 on 18th August 2017. It made a 52-week low at Rs59.50 on 15th March 2017 and a 52-week high of Rs128.45 on 09th August 2017. The 200 days Exponential Moving Average (EMA) of the stock on the daily chart is currently at Rs94.31.
After making low of Rs72, the stock has rebounded sharply from lower levels and traded above Rs118, which was its 200DEMA. Then after, it is consolidating in the range of Rs108-122 levels and forming “Bull Flag” pattern on weekly charts, which is considered to be bullish.
Therefore, one can buy in the range of 114-116 levels for the upside target of 132-135 levels with a stop loss below 105.