Benchmark indices ended in red for the sixth consecutive session on October 7. Last week, indices lost nearly three percent after the Reserve Bank of India’s Monetary Policy Committee (MPC) lowered India's GDP growth forecast sharply to 6.1 percent and increased Q2FY20 inflation forecast to 3.4 percent from 3.1 percent.
Last week, the Sensex plunged 1,149.26 points (down 2.9 percent) to end at 37,673.31 while Nifty shed 337.6 points (down 2.9 percent) at 11,174.8.
The monetary policy committee on October 4 slashed repo rates by 25 bps to 5.15 percent and kept the stance accommodative to revive growth in Asia's third-largest economy.
There is strong support around 11,000 for Nifty, and, if it breaks below that, the Nifty could test 10,850-10,800 levels, experts feel.
On the other hand, Nifty would face hurdles at 11,300 and 11,400 on the higher side. Until the market has a reversal formation, we should avoid taking any short-term trading call.
Here are top eight technical picks that we collated with an upside of 4-35 percent in short to medium term:
Shrikant Chouhan of Kotak Securities:
It is failing to sustain above the level of Rs 2,000, which is negative and may decline to the next support that is placed around Rs 1,900-1,880 levels.
It is forming lower lows on daily charts, but the fall is gradual and is trading in a wide range. If HDFC corrects towards Rs 1,900 levels, investors can go long with a final stop loss placed at Rs 1,800.
Infosys is indicating that it would remain range-bound between Rs 835 and Rs 765. Take profit on trading positions only if it bounces towards Rs 830-835.
The stock is the most outperforming stock of the basket in the last two months. It was trading around Rs 2,900 levels, and, from there, it went towards Rs 4,100 levels. The price formation suggests that the strategy should be to buy on dips at major supports like at Rs 3,700 and Rs 3,500.
Ajit Mishra of Religare Broking
Rating: Buy | Target: Rs 1,130 | Stop Loss: Rs 1,045 | Upside 4 percent
HCL is one of the strongest counters in the IT pack. It is currently hovering around the support zone of multiple moving averages on the daily chart. Besides, it is trading in an up-trending channel and recently tested the lower band of the same.
Put together, we expect a gradual rise from here on thus we advise creating fresh longs in the given range.
Rating: Buy | Target: Rs 256 | Stop Loss: Rs 220 | Upside 10 percent
Biocon has witnessed a decent correction from the top and has now retraced closer to its major support zone of the long term moving average i.e. 200-EMA on the weekly chart.
It has been consolidating around the same for the past two months and now trading on the verge of a sharp rebound from that zone.
Further, oversold positions combined with the existence of major support is adding to the positivity. We advise creating fresh longs in the mentioned zone.
Shabbir Kayyumi of Narnolia Financial Advisors
Rating: Buy around Rs 37 | Target: Rs 50 | Stop Loss: Rs 31 | Upside: 35 percent
This stock has a Cup and Handle Pattern in the daily chart which is on the verge of breakout. The crucial resistance of the 50 SMA has been recently taken off which indicated short term momentum to the uptrend. The momentum indicator MACD has crossed the signal line indicating a start of a trend.
It was until recently undergoing a larger time frame consolidation which we think was pause in the larger trend, which now is resuming. We recommend a buy in stock around Rs 37 with a stop loss of Rs 31 and target Rs 50.
Rating: Buy around Rs 37 | Target: Rs 48| Stop Loss: Rs 32| Upside: 29 percent
The stock has been forming a double bottom pattern on the daily chart. A close above Rs 42 should confirm the bias on the up side and trigger double bottom pattern play. The crucial resistance of the 50 SMA is important to breach for short term momentum to the uptrend. RSI divergence while forming double bottom is also support for the up move. We recommend a buying stock around Rs 37, stop loss Rs 32 and target Rs 48.
Rating: Buy around Rs 670 | Target: Rs 770 | Stop Loss: Rs 620 | Upside: 15 percent
The stock has witnessed a decent correction recently from the peak of Rs 744 and took a halt near the base of previous breakout of cup and handle pattern on daily chart. RSI has been hovering above 50 and MACD has indicated a reversal to maintain a positive bias which is showing potential to rise further in the coming days.
Moreover, it took support from 200 DMA which also suggest bullish move on upside. With the chart looking attractive and the volume participation witnessed being decent, we recommend a buy around Rs 670 in this stock for an upside target of Rs 770; keep a stop loss of Rs 620.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their 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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