by Shitij Gandhi Senior Research Analyst, SMC Global Securities Ltd On the technical front, 10,420-10,400 spot levels will act as key support zone for the Nifty index with current trend likely to continue towards 10,500-10,550 levels in the coming sessions.
The market undertone remained bullish with the support of consistent short covering and long buildup. The derivative data indicates that the bullish scenario is likely to continue.
The Nifty has multiple strong supports placed at lower levels around 10,420, 10,400 & 10,350 spot levels. We will see some short covering on every dip as put writers were active in the recent rally.
We have seen put writing in 10,300, 10,400 puts along with unwinding in calls. Among Nifty Call options, the 10,500-strike call has the highest open interest of more than 60 lakh shares.
However, we have seen unwinding in 10,500 call strike as well in the recent rally which indicates that bears are not feeling comfortable and we can see more upside in Nifty.
On the technical front, 10,420-10,400 spot levels will act as key support zone for the Nifty index with current trend likely to continue towards 10,500-10,550 levels in the coming sessions.
Here is a list of top five stocks which can give up to 17% return in short term:
NRB Bearing Limited: BUY| Target Rs195| Stop Loss Rs150| Return 17%
In the recent past, the stock has given a breakout above Rs135 levels and since then it is trading in a rising channel forming higher highs and higher lows on the daily charts.
In Tuesday’s session once again, the stock surged higher and gave a break above the rising trend line of the channel along with hefty volumes.
This clearly indicates more upside in prices moving forward. Traders can accumulate the stock in a range of Rs166-171 for the target of Rs195 and a stop loss below Rs150.
Aurionpro Solutions Limited: BUY| Target Rs212| Stop Loss Rs170| Return 14%
After witnessing a sharp rise from Rs150-190 levels, the stock has been consolidating in a range of Rs165-190 from the last eight weeks and formed a rectangle formation on the daily and weekly intervals.
However, in Tuesday’s session, bulls were seen interested in the scrip as prices surged higher with marginally higher volumes along with positive divergence on the RSI and stochastic indicator on the daily charts.
Traders can accumulate the stock in a range of Rs185-189 for the upside target of Rs212 and a stop loss below Rs170.
Crompton Greaves Consumer Electricals Limited: BUY| Target Rs299| Stop Loss Rs238| Return 15%
After a consolidation breakout above Rs225 levels, the stock surged sharply higher in the recent past and tested Rs290 levels in a very short span of time.
However, since then prices have been seen fluctuating in the range of Rs255-280 levels. In the last four weeks, this consolidation has formed symmetrical triangle formation on a daily interval which is traded as continuation pattern of the previous trend.
Additionally, prices are also getting well supported by its short and long-term moving averages. Traders can accumulate the stock in a range of 260-265 for the target of 299 with a stop loss below 238.
DCB Bank Limited: BUY| Target Rs220| Stop Loss Rs180| Return 12%
The stock has been consolidating in the range of Rs175-195 for more than fifteen weeks and formed a pennant formation on a weekly interval.
However, in Tuesday’s session, the stock managed to give a breakout above the key resistance of 195 level and also above the pattern formation along with decent volumes.
Traders can accumulate the stock in a range of 195-197 for the target of 220 with a stop loss below 180.
Rallis India Limited: BUY| Target Rs276| Stop Loss Rs220| Return 15%
After dipping below its 200-days exponential moving average on daily intervals, the stock recovered sharply from its lows and once again holding above 200-days EMA.
On a broader picture, the stock has been consolidation in range of 220-250 from last eleven weeks and formed bullish flag formation on a weekly interval.
The formation is traded as a continuation pattern. Traders can accumulate the stock in a range of 240-245 for the target of 276 with a stop loss below 220.