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Thursday, September 7, 2017

Nifty likely to face resistance around 10K; 4 stocks which can give up to 20% upside

Bonanza expect markets to consolidate and any break below 9880 levels should be a reference point to lighten up long positions.

The Nifty index managed to close above its triangle pattern which was broke in Friday’s session of last week. On Wednesday, index opened gap down but managed to close above 9,900 making strong support at 9,900-9,880. NIFTY FREE TRAILS TIPS

Last week, the index managed to close above 9,950 and formed a ‘Hammer’ kind of candle pattern on the weekly charts. This week, Nifty again took resistance at 9,980 and due to the geopolitical concern we have seen selling pressure in the index.

For the coming sessions, the index has strong support near 9,880 followed by 9850 and breaking below 9,850 we may see more drag down in index up to 9,740.

On the higher side, Nifty witnessed strong resistance near 10,000 and any decisive break above 10K will take the index to fresh highs.

The derivative data suggests a range for September month would be in between 10,000 to 9700 as highest open interest seen in 9,700 PE followed by 9,800 PE and on higher side while the highest open interest built up was seen in 10K CE.

We expect markets to consolidate and any break below 9880 levels should be a reference point to lighten up long positions.

If the index holds above 9900-9880 then there is a possibility that Nifty may touch 10K levels in the near term as it’s trading above its triangle pattern.

Here is a list of four stocks which can give up to 20% return in short term:

Berger Paint: BUY | Target Rs 310| Stop Loss Rs 240| Upside 20%

On the weekly chart, the stock has given a decisive bullish flag breakout with decent volumes, hinting that the stock is ready to touch fresh record highs.

On the daily chart, the stock broke its downtrend channel pattern and closed above the same with strong volumes.

The stock is trading in an overall uptrend and the recent correction in the stock can be considered as a healthy correction. The stock has a strong resistance near 268-270 zones, and a break above the same stock will active bullish cup and handle pattern which has target nearly Rs 350.

Considering above technical setup, traders can accumulate the stock at current levels to any dip near 255 for the target of Rs 310 & Rs 350 with a stop loss below Rs 240 on a closing basis.

Indo Count Industries: BUY| Target Rs 140 | Stop Loss Rs 112 | Upside 15%

The stock touched the high of Rs210 in the month of May and from there we have seen a heavy fall in the counter to the recent low of Rs96. The stock was trading in an extremely oversold zone, as a result, it has given a bounce to Rs117 levels.

If we observe current chart structure, the stock has given a breakout above Rs120 levels on Wednesday session which was very strong resistance for a stock and we witnessed quick move towards 127 in the counter on the same day.

On the daily charts, it seems that the stock has formed a short term bottom and is all set to bounce more from current levels towards Rs140 mark.

Bonanza recommends traders to buy the stock at current levels for the target of Rs140 and keep a stop loss below Rs112 on a closing basis.

Ramco Cement: BUY | Target Rs 800| Stop Loss Rs 680| Upside 11%

After touching fresh highs in late January, the stock went in consolidation phase which is considered a good sign for a long run and in Tuesday’s session, the stock has given a decisive breakout with strong closing above the Rs722 zone.

We have witnessed very good volume activity at the time of breakout. As per consolidation break pattern, the target is arriving somewhere close to Rs 800. The momentum indicators such as RSI has also given a break above 60 which is again positive sign.

Considering above technical breakouts, Bonanza recommends a buy call on stock at current levels to any dip near Rs714 for the target Rs800 and keep a stop out level below Rs680 on the closing basis.

L&T Technology: BUY | Target Rs 500 | Stop Loss Rs 397| Upside 15%

The stock has not performed historically and we have seen continually lower lows in the counter, but now stock chart showing potential at current levels.

On the daily chart, the stock has broken its long term downtrend line with decent volume along with it stock has given double bottom breakout also which suggest some trend reversal is going to happen.

We can see positive divergence also in RSI and stock is trading above all strong DMA’s like 200-100 etc. Traders can take the position in the counter at current levels to any dip near 776 for the targets of 870 and stop out levels can be kept below 750 on a closing basis.

Disclaimer: The author is Senior Research Analyst, Bonanza Portfolio Ltd. The views and investment tips expressed by investment expert on Moneycontrol are his own and not that of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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