By Pushkaraj Sham Kanitkar
In line with geopolitical tension, Nifty index witnessed weak Friday session to end with a loss of 63.65 points or 0.69 percent at 9,198.30. On the daily chart, as well as on the weekly chart, a red body candle is formed indicating resistance or profit booking at 9,275 levels.
For the week ahead, with the global turmoil looming in the background, the index may see a further price correction; however, we do suspect that there is simply not a lot of room on the downside and previous swing low at 9,000 to hold.
In such a scenario, any dip towards 9,000 to act as a buying opportunity; whereas on the flip side, Nifty may witness resistance around 9,275 levels where prices witnessed profit booking twice during the week.
Hence our bias remains bullish and having a stock specific long approach. Here is a list of top five stocks to buy or sell in the short term:
BHEL: BUY| Target Rs 201| Stop Loss 163| Upside 16%
The stock has created a strong demand zone around the Rs 163 mark, with multiple touch points from Sep 2016, Feb 2017 highs and March 2017 lows.
BHEL has maintained a positive orbit over last 3 months, as indicated by positive alignment of shorter-term moving averages such as 15 & 25-DMA and also longer term moving averages like 50 & 200-DMA.
“We expect a move onto Rs 181 (around 3%) from current levels, which if crossed further may move onto 201. A stop loss maybe placed a bit below the multiple touch points at Rs 163,” said Kanitkar.
Mahindra CIE: BUY| Target Rs 242| Stop Loss Rs 204| Upside 7%
The stock created a 52-week high recently at Rs 230.95 on 03/4/2017. This also corresponds to a breakout from a long 1-year consolidation, as seen in the weekly charts. We maintain a positive orbit over last 3 months, as indicated by higher top and higher bottom formations.
There is a positive alignment of long-term moving averages, with 50 DMA above 100 DMA which in turn is above the 200-DMA. “We expect a move onto Rs 233-243 from current levels with a stop loss placed a bit below the Bollinger breakout channel placed at Rs 204,” said Kanitkar.
Maruti Suzuki India: BUY| Target Rs 6,700| Stop Loss Rs 5,970| Upside 7%
After hitting the psychological 6000 (5974 as on 01.11.2016) the stock corrected by a good 15-17 percent till mid-December 2016. It has seen a good gradual move till early February 2017 at the time of a fresh breakout above Rs 6,000.
There has been a good consolidation in the range Rs 5,830 to Rs 6,230 in the previous 2 months, wherein a double bottom around Rs 5,830 is a stellar point.
A positive cross-over of daily RSI (55) above the trigger line (51) recently indicates an impending momentum. Also, it’s still far off from the overbought 70 levels, indicating creating of space.
A breakout above the 52 week HIGH @ 6227, indicates a move out of consolidation and may see a stellar move till 6450 & 6700 in that order. The stop loss for the trade is placed at 5970 on a closing basis, indicating the negation of the up-move.
Cadila Healthcare: BUY| Target Rs 481| Stop Loss Rs 438| Upside 6%
The scrip has given a consolidation breakout @ 457 level with volume confirmation. As can be seen in the chart, the stock is in long term Bullish Trend with the formation of Higher Top Higher Bottom sequences in all time frames viz Daily, Weekly as well as Monthly.
We have seen that the medium term 13 (446) & 34 (432) exponential moving average have remained positively aligned since last 2 months on daily charts, which is an additional cause for current bullish momentum to sustain.
The indicator like RSI is showing a positive crossover and currently placed at Rs 63, which indicates a positive move may possible in near future.
Ajanta Pharma: SELL| Target Rs 1651| Stop Loss 1850| Return 4%
In line with the overall weak trajectory in the pharma sector, the prices have remained subdued spanning last 3 months.
The last 2 weeks have seen prices moving down to Rs 1,760 after testing the facing a stiff resistance at the moving average convergence around the Rs 1,800-1,850 mark.
The level also has multiple touch points with highs of January & March 2017. The prices are on course for a correction below the 6-month lows of around the Rs 1,725 mark.
We feel this may lead to Rs 1651-1625 levels further down. The bearish view would stand negated only on a closing above the 1850 mark.
Disclaimer: The author is AVP – Technical Research at GEPL Capital. The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Chillicious.com advises users to check with certified experts before taking any investment decisions.