The Nifty50 ended trade significantly lower as constant selling throughout the session led to a close below the 11,700 level on June 17.
Further, the index is now approaching the Gap-support zone of 11,620-11,590 formed after the exit poll results. A move below this support may drag the index lower to cover up the gap i.e. 11,425.
On the flip side, a sustained move above 11,620-11,590 can trigger short covering rallies to levels of 11,830-11,870.
The Relative Strength Index (RSI) on shorter time frame has reached oversold territory suggesting that 11,620-11,590 can act as immediate support in the coming trading sessions.
Here is a list of three stocks which could give 6-13 percent return in the next 3-4 weeks:
JB Chemicals & Pharmaceuticals: Buy | LTP: Rs 381 | Target: Rs 410-430 | Stop Loss: Rs 360 | Upside 8-13 percent
On the weekly chart, the stock has broken out from a rounding bottom pattern resistance line placed at Rs 365.
Further, a sustained trade above Rs 390 backed by healthy volumes will extend the up move in the stock, taking it higher to levels of Rs 410-430.
Moreover, on the daily chart, it is on the verge of a breakout from a bullish flag resistance of Rs 385. A breakout from the flag consolidation will resume the uptrend in the stock.
The RSI has also turned north after taking support at the 50-level forming a higher low. The stock may be bought in the range of Rs 378-383 for the targets of Rs 410-430, and keep a stop loss below Rs 360.
Tata Elxsi: Buy | LTP: Rs 867 | Target: Rs 930-970 | Stop Loss: Rs 825 | Upside 10-13 percent
On the daily chart, Tata Elxsi has broken out from a channel pattern after making a higher low suggesting resumption of the bull trend on cards.
A sustained trade beyond this resistance line i.e. Rs 880 will take the stock higher towards levels of Rs 930-970. Further, on the weekly chart, it on the verge of a breakout from a sideways consolidation pattern after a series of long lower shadows indicating higher levels in the coming trading sessions.
The RSI has also turned higher after making a positive divergence suggesting higher levels. The stock may be bought in the range of Rs 865-870 for targets of Rs 930-970, and keep a stop loss below Rs 825.
Dabur India: Sell | LTP: Rs 401 | Target: Rs 378-356 | Stop Loss: Rs 415 | Downside 6-11 percent
On the daily chart, Dabur India has completed its Wave IV and resumed its impulse Wave V which is a down wave within a massive V wave correction.
A move below Rs 398 will drag it lower to levels of Rs 378-356. Moreover, on the weekly time frame, it has turned lower after facing resistance at the 50 percent Fibonacci retracement level suggesting lower levels in the coming trading sessions.
Further, RSI is also suggesting lower levels in the coming trading sessions as it has turned lower from the 60 zone. The stock may be sold in the range of Rs 404-400 for targets of Rs 378-356, and keep a stop loss above Rs 415.
The author is Senior Manager, Technical Analysis, YES Securities
Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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