Podcast | Stock picks of the day: Nifty to end August expiry between 10,800 and 11,200

The Nifty witnessed a V-shaped reversal rally but the gains were capped at 11,150 levels on August 28. On the lower side, as per the change of polarity principle, the short-term moving average -- 20-day EMA -- for the index is currently working as a key reversal point.

Last hour buying on August 28 pushed the price above its important physiological mark of 11,000, which has squeezed the body of the candle with a slightly longer wick on its lower side.

The level of 11,150 is further supported by the Fibonacci ratio on the daily interval for the benchmark index. Currently, the Nifty pack is trading between its 50 (11,200) and 100-EMA (10,800) band on the weekly timeline.

On the Options front, maximum Put open interest (OI) is placed at 11,000 strike. The maximum change in Call OI is seen at 11,100, followed by 11,200 strikes.

The next immediate support for the Nifty is placed at 10,800 levels, while resistance is observed at 11,200 levels. Now, a breakout on either side of the band will give a clear indication of the further trend.

Here is a list of top three stocks that could return 6-7% in the next 3-4 weeks:

ICICI Lombard General Insurance: Buy| CMP: Rs.1,249.85 | Target: Rs 1,343 |Stop Loss: Rs 1,200| Upside 7.5%

After a prolonged consolidation, the recent price action in ICICI General has pushed the price above its trendline resistance on the daily interval which is a positive sign.

The said breakout is supported with sizeable volumes and strong bullish candle. The stock is sailing above its major exponential moving averages on the daily time frame.

Momentum Oscillator RSI (14) is reading above 50 levels with positive crossover. Currently, MACD indicator is reading above the line of polarity with positive crossover.

Traders can accumulate the stock in the range of Rs 1,245-1,255 for the target of Rs 1,343 with a stop loss below Rs 1,200.

Bata India: Buy| CMP: Rs.1,507.70 | Target: Rs 1,620 |Stop Loss: Rs.1,445 | Upside 7.5%

Prices on the weekly charts have witnessed a breakout of a Rectangle pattern on the weekly interval charts is placed at Rs 1,481 levels.

Recent price action has forced prices to surpass its horizontal trend line resistance which has helped the price of the stock to move in uncharted territory.

A price pattern breakout has supported with an above-average volume on the weekly interval chart.

The momentum oscillator RSI (14) is hovering between a 55 - 65 ranges which hint for the continuation of ongoing momentum.

Traders can accumulate the stock in the range of Rs 1,360-1,370 for the target of Rs 1,460 with a stop loss below Rs 1,310.

Jubilant Foodworks: Sell|CMP: Rs 1,185.25 | Target: Rs 1,115 |Stop Loss: Rs 1,230| Upside 6%

The stock price has completed its pullback on the weekly chart of its recent breakdown of the rising wedge pattern.

The Wednesday’s upside has got capped at Rs 1,223 levels which is supported by the resistance of 50-EMA on the weekly interval.

The dark cloud cover bearish candle stick pattern is formed on a daily scale.

The 50-days EMA resistances is also supported with a 50% Fibonacci retracement levels on the weekly time line.The lower high lower low formation is intact in the daily chart which adds for further weakness in the near term.

The stock may be sold in the range of Rs 1,183 -1,188 for a target of Rs 1,115, and keep a stop loss above Rs 1,230.

(The author is Technical Analyst, Bonanza Portfolio Ltd)

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