Mehul Kothari
Nifty needs to clear the immediate hurdle placed around 11,700. This being a truncated week, the index has failed to clear the hurdle so far.
The index remained in a tight range during the past three sessions and is currently trading with a weekly change of -0.68 percent. Meanwhile, the Bank Nifty (-0.04%) is extremely flat from its previous week’s close.
Now, there is a slight change in our view. Earlier, 11,700 was a strong hurdle for us, but now we are of the opinion that the 11,700-11,800 range is decisive for the market.
Going forward, a move above 11,800 could be an extremely strong sign for the bulls because above 11,800, the index has the potential to make a new high (somewhere near 12,200 levels is possible).
The next 100 points will be very crucial for the Nifty. We advise traders to hold their longs, but with a strict stop-loss of 11,500. A move below the same might halt the upside momentum and we could witness some profit booking.
The Bank Nifty is struggling in the range of 29,500–30,000, the 61.8% and 78.6% retracement levels of the previous dip. Only a sustainable move above 30,000 would now support the index for further rise, which can eventually contribute to a rally in the Nifty.
Here is a list of top three stocks that could return 14-20% in the next 1-3 months:
Bharat Forge: Buy| LTP: Rs 451| Target: Rs 530| Stop-Loss: Rs 413| Upside +17.5%
The weekly chart of Bharat Forge depicts a trend line breakout since Sept 2019. Further, the stock just confirmed a breakout above Rs 465 which has resulted in a higher top higher bottom formation on the weekly chart and thus it indicates a change of trend.
Recently, the stock managed to clear its 200 Day simple moving average. In addition, we are observing a positive crossover of 5 & 20 EMA on the weekly time frame.
The price action is supported by a breakout in the weekly RSI. Traders are advised to buy the stock near 450 for an upside target of Rs 530 with a stop-loss of Rs 413. (1–3 months)
Motherson Sumi Systems: Buy| LTP: Rs 111| Target: Rs 127| Stop-Loss: Rs 101| Upside +14.4%
Similar to Bharat Forge, even Motherson Sumi is on the verge of a breakout from its falling trend line placed at Rs 112.
A move above Rs 112 might result in a positive crossover of +DMI and –DMI in a weekly ADX indicator, which could trigger a sharp upside.
We are also witnessing a breakout in the weekly RSI. Traders are advised to buy the stock between Rs 111 and Rs 108 for the upside target of Rs 127 with a stop-loss of Rs 101. (1–3 months)
Jay Bharat Maruti: Buy| CMP: Rs214| Target: Rs 256| Stop-Loss: Rs 187 | Upside +19.6%
Even Jay Bharat Maruti has a similar chart structure like Bharat Forge and Motherson Sumi. In the recent session, the stock confirmed a trend line breakout above the Rs213 mark.
This breakout was accompanied by humongous volumes, which makes it more reliable.
In addition, there is again a change of trend on the weekly chart along with a clear breakout in the RSI.
Traders are advised to buy the stock between Rs 212 and Rs 208 for the upside target of Rs 256 with a stop-loss of Rs 187. (1–3 months).
(The author is Sr. Technical Analyst, IndiaNivesh Securities Limited)
Disclaimer: The views and investment tips expressed by investment experts 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.
Discover the latest business news, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
