Ajit Mishra
Markets settled with a cut of over half a percent last week amid mixed cues.
Weaker-than-expected GDP data combined with dismissal auto sales numbers triggered a sharp decline in the beginning. However, the US-China trade war truce and buying in select index majors provided relief in the following sessions and helped the Nifty pare some of its losses.
Finally, the Nifty failed to surpass the hurdle at 11,000 and settled at 10,946.20, down by 0.70 percent.
This week is also a holiday-shortened one and markets will be eyeing Index of Industrial Production and Consumer Price Index data, to be released on September 12.
Besides, global cues, movement of the crude and currency market trend will be on their radar as well. We reiterate our bullish yet cautious approach for this week as well.
A decisive break above 11,000 will help the Nifty to test 11,250-11,300 levels. In case of a decline, 10850-10,750 zone will provide the needed cushion, thanks to the existence of crucial moving average support (100 EMA) on the weekly chart. Meanwhile, volatility could remain high.
A list of top three stocks that could give 3-10 percent return in the next three-four weeks:
Asian Paints Ltd: Buy|LTP: Rs 1540.60| Target: Rs 1,595| Stop Loss: Rs 1,500|Upside 3.9 percent
After a marginal correction from its record high, Asian Paints has reached closer to the support zone of 50-day EMA on the daily chart.
Indications are in favour of marginal consolidation, followed by a rebound in the near future. Considering its chart pattern and overall upside trend, we expect a steady rise ahead. We suggest initiating fresh longs within Rs 1,525-Rs 1,535 range.
Biocon Ltd: Buy| LTP: Rs 233.45| Target: Rs 250| Stop-Loss: Rs 222|Upside 7.7 percent
Biocon witnessed correction after a breakdown from the consolidation range and tested the major support zone of the long-term moving average (200 EMA) on the weekly chart.
The stock has been consolidating around the same for one month and is likely to see a fresh surge in the days to come. We advise creating fresh longs in the mentioned zone of Rs 229-Rs 232.
Manappuram Finance Ltd: Buy| LTP: Rs 123.80| Target: Rs 136| Stop Loss: Rs 117| Upside 9.7 percent
Manappuram has been consolidating in a range for past one month while holding firm above the crucial support zone of 200 EMA on the daily chart.
On September 9, it surged strongly with a noticeable rise in volume, resulting in the formation of a fresh buying pivot.
Traders are advised to use this opportunity and initiate fresh longs in the given range of Rs 122-Rs 124. It closed at Rs 123.80 on September 9.
(The author is Vice President, Research, Religare Broking)
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