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'Nifty likely to make a move towards 12,000 in run-up to the Budget'

The technical structure on the daily interval also suggests the upside momentum is likely to continue in the coming sessions

July 03, 2019 / 09:33 AM IST
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Shitij Gandhi

Indian indices began the week on a positive note and extended its gains for the second consecutive session with Nifty closing above 11,900, supported by buying in select stocks such as HDFC twins, Infosys, Reliance Industries and ONGC on July 2.

The overall sentiments turned positive on optimism ahead of Budget 2019 which is scheduled to be presented later this week.

From the derivative front, Put writers were active in 11,800 and 11,850 strikes in weekly contracts that should act as support for the Nifty with (weekly) expiry point of view.

However, on the higher side, immediate resistance is placed at 11,980-12,000. The technical structure on the daily interval also suggests the upside momentum is likely to continue in the coming sessions.

Last week also we have observed technical breakout above the falling trend line on a shorter time frame that suggests bears are likely to remain on the back foot as of now and Nifty should move towards 12,000 in coming sessions.

Here are three stocks that could return 7-12 percent in the next 3-4 weeks:

IPCA Laboratories: Buy| Target: Rs 1,057| Stop loss: Rs 900| Upside: 10 percent

For more than six weeks, the stock has been consolidating in a range of Rs 900-950 and is hovering above its long-term moving averages along with consistent buying at support levels.

This week, we have observed fresh consolidation breakout into the prices along with marginally higher volumes that suggest upside move forward.

Traders can accumulate the stock in the range of Rs 960-965 for the upside target of Rs 1,057, with a stop loss below Rs 900.

Can Fin Homes: Buy| Target: Rs 409| Stop loss: Rs 340| Upside: 12 percent

In the recent past, after taking support at its 200-day exponential moving average (EMA) on the daily charts placed around Rs 310, the stock has risen sharply above Rs 350 in a short span of time.

Since then, prices are maintaining well above its short-term moving averages and the stock is trading with the formation of higher top and higher bottom pattern.

On the weekly interval charts as well, the stock is maintaining above its long term moving averages and is on the verge of a fresh breakout above the key resistance levels of Rs 365.

A breakout above Rs 365 can add further momentum into prices moving forward. So, traders can buy the stock above the breakout level of 365 for the upside target of 409, with a stop loss below 340.

Larsen & Toubro: Buy| Target: Rs 1,670| Stop loss: Rs 1,500| Upside: 7 percent

The stock has been consistently trading in a rising channel on the daily interval and tested its 52-week high of Rs 1,607 last month.

On the technical charts, the stock has managed to take support at its 20-day exponential moving average on the daily interval.

It has also given a breakout above the symmetrical triangle pattern that can move prices towards 52-week high in the coming sessions.

Traders can accumulate the stock in the range of Rs 1,560-1,565 for the upside target of Rs 1,670, with a stop loss below Rs 1,500.

The author is a Senior Research Analyst, SMC Global Securities Ltd.

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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