Nifty to consolidate between 10,100-10,380; 3 stocks which could give up to 16% return
On the lower side, 10100 will act as a strong support and till the time index is holding above this level every meaningful correction is an opportunity to enter in the long position.
Aditya Agarwal
The Thursday’s sharp upmove in Indian markets can be termed as a Bear Trap as Nifty opened higher with a significant gap and eventually surpassed the crucial resistance zone of 10,280 – 10,300 levels.
In that process, Nifty confirmed its breakout from ‘Downward Sloping Channel’ pattern.
The bearish engulfing candle formed on Wednesday’s trade was negated as Nifty closed above the pattern high of 10,280.
At this juncture, the hourly RSI (14) signals a Bearish Divergence hence it’s prudent to wait for some pullback to enter a long position. On the higher side, Nifty is likely to extend its ongoing short covering move towards 10,450.
Whereas on the lower side, 10,100 will act as a strong support and till the time index is holding above this level every meaningful correction is an opportunity to enter in the long position.
Here are the lists of top 3 stocks which could give up to 16% return:
Apollo Tyres: BUY around 290 – 288| Target 340| Stop loss 270| Timeframe 15 to 21 sessions| Return 16%
On the weekly chart, the stock confirmed its breakout from the Bullish Cup & Handle pattern on Thursday. The volume activity too started accelerating which support our hypothesis.
The daily as well as weekly RSI (14) entered inside the 60 levels. The conservative target of cup & handle formation comes near Rs340. A stop loss should be placed below Rs270.
TATA Elxsi Ltd: BUT around 1020 – 1010| Target 1150| Stop loss 950| Time frame 15 to 21 trading sessions| Return 12%
Tata Elexi has been consolidating in a narrow range of 960-1060 for almost last 2 months and on daily charts, the stock has formed a Descending Triangle pattern. The said pattern is a continuation of an ongoing uptrend.
The weekly Higher Top and Higher bottom formation is intact. In Thursday’s trade, the stock confirmed its breakout from the triangle pattern.
Hence, we advocate traders to buy this stock in a range of 1020 to 1010 with an upside price target of 1150. A stop loss should be placed below 950 on a closing basis.
Bharat Forge Ltd: SELL around 730 – 735| Target 670| Stop loss 760| Time frame 15 to 21 trading session| Return 7%
After posting an all-time high of 798, the stock corrected sharply and hit a low of 678. Subsequently, stock saw decent pullback however it is struggling near 730 – 740 range which coincided with its previous resistance zone as previous support became an immediate hurdle.
The hourly RSI (14) is signaling an overbought condition. Hence, we recommend traders to go short in a range of 730 to 735 with a price target of 670. A stop loss should be placed at 760.
Capital Ways Investment Adviser
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