Wednesday, 31 May 2017

Nifty to inch towards 9,700; 5 stocks which can give up to 13% return in short term

From the last few sessions, Nifty is showing sideways moves but with positive bias along with the addition of decent open interest.

In June series, most of the Nifty futures have been rolled over in the band of 9,360 to 9,500 with average long rollover around 9,430. The current outstanding open interest for Nifty futures is 2.07 crore shares.

Therefore, strategy for June series should be buying on dips if we get any dip near 9,500-9,550 as from current levels 9,500 should act as strong support. STOCK FREE TIPS

From the last few sessions, Nifty is showing sideways moves but with positive bias along with the addition of decent open interest.

The Nifty has added nearly 19 lakh shares of open interest in last two days indicating accumulation in consolidation indicating a fresh up move towards 9,700 soon.

Options writers are also active in ATM and lower strikes of 9600 & 9500 put options. FIIs options data also indicates fresh buying in index calls (9500, 9600) post expiry.

Overall derivative data is positive and the next resistance is placed around 9700 having maximum calls open interest.

Top 5 stocks based on technical parameters which can give up to 13% upside in the short term:

Godrej Industries: BUY| Target Rs 685| Stop Loss Rs560| Upside 13%

The stock has been continuously trading in a rising channel and is making higher highs and higher lows on the daily charts. In Monday’s session, the stock saw a fresh breakout above Rs600 levels.

Also, the stock has highest open interest concentration in 600 call option strike in June series which got broken indicating sharp upside movement in prices going forward.

Traders can accumulate the stock in a range of Rs605-610 for the upside target of Rs685 and a stop loss below Rs560.

Vinati Organics: BUY| Target Rs965| Stop Loss Rs820| Upside 10%

The stock has given a fresh breakout above Rs775 in mid-April’17 and since then consolidation in prices has been seen in a range of Rs890-820 levels. On the daily charts, the stock has formed triple bottom formation around Rs820 levels and thereafter given sharp upside towards Rs885 levels.

The consolidation between Rs890-820 levels has also formed rectangle formation on the daily charts which is generally traded as a continuation pattern.

Traders can accumulate the stock in a range of Rs885-875 for the upside target of Rs965 with a stop loss below Rs820.

PNB Housing Finance: BUY| Target Rs 1,485| Stop Loss Rs 1,250| Upside 10%

In the recent past, prices have rallied from Rs1,000 to Rs1,400 levels in a short span of time. However, amid profit booking at higher levels stock slid towards Rs1,200 levels which are also its 50% retracement level of the previous rally and took support there.

In the week gone by, V-shape recovery in prices has been seen which indicates that bulls are once again active in this scrip. On a shorter time frame (90 mins chart) the stock has also formed inverted head & shoulder formation which is again bullish in nature.

Traders can accumulate the stock in a range of Rs1,350-1,360 for the upside target of Rs1,485 with a stop loss below Rs1,250.

Godrej Consumer Products: BUY| Target Rs2030| Stop Loss Rs1,750| Upside 9.5%

After consolidating in a range of Rs1,600-1,700, the stock has given a fresh upside breakout along with larger volumes and tested Rs1,900 levels.

Since then, retracement has been seen in prices. Moreover, the stock is trading well above its short and long term moving averages on the daily charts indicating bullish momentum.

In Tuesday’s session, buying has been seen as the scrip has managed to close above its recent resistance of Rs1,850. On the shorter time frame, the stock has formed an inverted head & shoulder formation which is bullish in nature.

Traders can accumulate the stock in a range of Rs1,850-1,860 for the upside target of Rs2,030 with a stop loss below Rs1,750.

Quess Corp: BUY| Target Rs945| Stop Loss Rs800| Upside 10%

The stock has been trading reasonably high over the period of time maintaining its bull run from Rs675 levels. In recent profit booking, prices were seen retraced towards its 50 DEMA on daily charts and bounce sharply from there.

Now, once again prices are showing strength as sharp rise above its short term moving averages along with positive oscillators indicates the bullish momentum to continue in coming sessions once again.

Traders can accumulate the stock in a range of 855-865 for the upside target of 945 with a stop loss below Rs800.

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