Nifty tested psychological level of 12,000 but failed to hold its gains. It finally closed June 11 trading session at 11,966, up 0.36 percent.
The broader market indices, i.e., BSE Midcap and Smallcap gained 0.8 percent and 0.3 percent, respectively. On daily charts, Nifty formed a Doji candle for the third consecutive day in a row.
But, at the same time, the index is forming high highs and higher lows suggesting buying coming in at higher levels. Although, immediate resistance remains at 12,000-12,100.
Nifty needs strong momentum to rally towards 12,300-12,380. On the downside, June 7 low of 11,769 remains as important support.
A break below 11,769 could lead to profit booking in the market towards 11,591 where rising gap support is seen.
India VIX closed at 14.5, down 3.3 percent on June 11. A decline in VIX is supportive for the market, and a further decline will aid the market in sustaining above 12,000.
Here are five stocks that could return 11-16 percent in the next 1 month:
Cholamandalam Investment and Finance: Buy | LTP: Rs 1,514 | Stop loss: Rs 1,450 | Target: Rs 1,700 | Upside: 12 percent
The stock touched an all-time high of Rs 1,760 in May last year and then corrected to a low of Rs 1,038 in October. Since then, the stock has witnessed a consolidation between Rs 1,555 and Rs 1,038 levels for the last nine months and formed a base.
It has been forming higher lows on the weekly charts which indicate buying coming at higher levels. The price has retraced 61.8 percent (Rs 1,483) Fibonacci retracement of the fall from Rs 1,760 to Rs 1,038.
On June 11, the stock rallied from the 21-day exponential moving average (EMA) that has been acting as a support and resistance for the stock.
The Relative strength index (RSI) and Stochastics have given positive crossover with their respective averages on the daily chart. Thus, the stock can be bought at current levels and on dips towards Rs 1,495 with a stop loss below Rs 1,450 and a target of Rs 1,700.
Infosys: Buy | LTP: Rs 755 | Stop loss: Rs 720 | Target: Rs 850 | Upside: 12 percent
The stock has witnessed consolidation in the last five months between Rs 773 and Rs 697. The recent low of Rs 697 was formed at 200-day moving average and then bounced back.
The rally has been on long body bullish candlestick on the daily chart which indicates buying participation in the stock. The Average Directional Index (ADX) line indicator of trend strength has moved above the equilibrium level of 20 on the daily chart.
Stochastic has given positive crossover with its average on the daily chart. Thus, stock can be bought at current levels and on dips towards Rs 745 with a stop loss below Rs 720 for the target of Rs 850 levels.
VIP Industries: Buy| LTP: Rs 460 | Stop loss: Rs 435 | Target: Rs 535 | Upside: 16 percent
The stock touched an all-time high of Rs 618 in the month of August, last year, and since then it has been in correction mode. It has been forming lower highs and higher lows. It formed a triangle pattern on the weekly chart over the period of the last 9 months.
It is currently trading around its breakout levels. The Relative Strength Index has given a positive crossover with its average levels on the weekly chart.
MACD line has moved above the equilibrium level of zero on the daily chart. Thus, the stock can be bought at current levels and on dips towards Rs 453 with a stop loss below Rs 435 and a target of Rs 535 levels.
Axis Bank: Buy | LTP: Rs 815 | Stop loss: Rs 790 | Target: Rs 920 | Upside: 12 percent
The stock is in an uptrend and has been forming higher tops and higher bottoms since last October low of Rs 534. The rally from the recent swing low of Rs 716 has been on higher volumes which indicates buying in the stock.
For the last couple of weeks, the stock has been trading in a narrow range. It has formed a bullish pole and flag pattern which is a continuation pattern on the daily chart.
MACD line has given a positive crossover with its average above the equilibrium level of zero on the weekly chart. Thus, the stock can be bought at current levels and on dips towards Rs 805 with a stop loss below Rs 790 and a target of Rs 920 levels.
UPL: Buy | LTP: Rs 1,035 | Stop loss: Rs 995 | Target: Rs 1,150 | Upside: 11 percent
The stock is in an uptrend and has been forming higher tops and higher lows since October's low of Rs 582 last year. After hitting an all-time high of Rs 1,044, the stock has been consolidating in a narrow range at higher levels for the last three weeks.
The stock has been moving along the 21-day exponential moving average which indicates that dips are getting bought into and buying is coming at higher levels.
On a closing basis, the stock has a new high and is showing signs of a breakout on the upside. The RSI has given a positive crossover with its average levels on the daily chart.
Thus, the stock can be bought at current levels and on dips towards Rs 1,020 with a stop loss below Rs 995 and a target of Rs 1,150 levels.
The author is Head of Technical and Derivatives, Sanctum Wealth Management.
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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