Earnings, global markets to set the trend on D-Street; 3 stocks with up to 15% return potential

On the macros side we will continue to look at bond yields and crude prices. We believe these are two biggest factors which can dampen the Indian market rally.  

The Dalal Street could watch out for reactions of Q4 numbers of Nifty companies. HDFC, Kotak Mahindra Bank will announce Q4 earnings on April 30. Dabur and Hindustan Media Ventures will post their earnings the next day.

Market will be closed on Tuesday due to Maharashtra Day. So, we will have only four trading days in this week.

On the macros side, the market will continue to look at bond yields and crude prices. We believe these are two biggest factors which can dampen the Indian market rally.

In US and Europe, results season is still going on. Particularly post Caterpillar and GE’s disappointing numbers we will closely watch for coming companies numbers, especially related to old economy.

In FANG stock, Facebook has posted very good set of numbers. We might see some relief rally in high beta US counters on back of this. So, in nutshell, next week's trend will be decided on the basis of quarterly earnings, trend in global markets.

Salasar Techno Engineering | Rating: Buy | Return: 15%

Salasar Techno Engineering enjoys 42% market share and all the major telecom operators are its customers having long term business relationship. The company has technical tie up with Rambol International for manufacturing and designing world class telecom towers of various qualities and range.

The current EBITDA margin is around 10%, which is expected to increase up to 11-11.5% on the back of huge order book, consistent demand and new projects for which the company has already submitted bid.

In FY17 Salasar Techno doubled its galvanizing capacity from 50,000 metric tons to 1,00,000 metric tons. Salasar Techno currently has an EV/EBIT of 9.72%.

At the current market price of Rs 387, company is trading at 11x multiple for FY19. We are recommending a buy with a target of Rs 445.

Vinyl Chemicals | Rating: Buy | Return: 9%

Vinyl Chemicals is a Pidilite group company. It is in the business of selling various speciality chemicals mainly to textile, paints and adhesive sectors. Vinyl Acetate Monomer (VAM) was manufactured in the plant located at Mahad in Raigad District, Maharashtra, India and was sold all over the world. Vinyl had major share of business of this product in India.

During 2007, the said plant was de-merged to resultant parent company Pidilite Industries for strategic reasons. However, the company's main focus remains in its product “Vinyl Acetate Monomer" (VAM). The VAM is now imported/sourced from various Global suppliers and distributed / traded in India.

Vinyl Chemicals India will maintain its major presence in the field of trading of various Speciality Chemicals in future all over the world. Currently, the stock is trading at 20x which we think is quite an attractive level given the bright future prospects and pedigree of Pidilite group.

Vinyl Chemicals will yield maximum benefits from structural changes are happening in chemical industry. Be it a production cuts from Chinese companies or continuously rising demand from Asian conglomerates. Vinyl Chemicals has all the ingredients to outpace the industry growth. We recommend a buy with a target of Rs 131.

Archidply Industries | Return: 13%

Archidply Industries is the flagship company of the Archidply group. The company is a manufacturer of wood panel products and decorative surfacing products.

The promoters of the company have been associated with plywood manufacturing for more than 30 years under the brand ‘Archidply’.

The management was responsible for the turnaround of the Mysore based particle board and plywood manufacturing unit which was shut down for seven years, before being acquired by the Archidply group. The company also has a good track record in executing projects on time.

The company started out with a single plant in Assam and has expanded the business to three facilities in Uttar Pradesh, Assam and Karnataka. The organized plywood industry is growing at a rate of 30 percent per annum driven by increased demand from institutional clients. Retail stores, corporate spaces and hospitality sector have seen huge growth and are fuelling the demand for Interior Infrastructure.

Looking at management pedigree and industry growth we believe Archidply will yield maximum benefits in coming days. We are recommending Archidply with target of Rs 108.

MORE WILL UPDATE SOON!!

Top 10 stocks which are likely to remain on traders’ radar in May series

The Bank Nifty under performed the benchmark indices in the month gone by and formed a good amount of mixed positions. Rollovers in banking index stood at 82.59 percent which is much higher than its 3-month average rollovers of 70.51 percent.

  

Post a decent correction in preceding two months, April series kick-started on a positive note and with a good amount of short positions. The Nifty continued to make higher highs as the month progressed.

April month was completely dominated by the ‘Bulls’ as we witnessed positive closing in 15 out of 19 trading sessions of April series.

As a result, Nifty concluded the April F&O series a tad above 10600 mark, with a gain of around 5 percent over its penultimate expiry.

Sectorally, IT sector was the centre of attraction for a major part of the April series as all the IT counters ended well in positive territory and they also added a huge amount of long positions.

The Nifty has retraced about 50 percent of the fall seen in February and March. In this up move, we witnessed the formation of fresh long positions.

Rollovers in Nifty stood at 72.32 percent which was above its quarterly average in both percentage term as well as in term of net open positions, which indicates that the long positions formed in the last month got rolled to the next series ahead of Assemble Election in Karnataka.

However, some of the previous shorts, which got rolled from March series, are still intact in the system. Foreign institutional investors or FIIs, who were light on positions at the start of series, too participated well in the up move and as a result.

FIIs 'Long Short Ratio' in index futures has moved higher from 18.20% (March expiry) to 54.40% (April expiry). At the same time, they sold equities worth around Rs. 8140 crore in last one month.

The BankNifty underperformed the benchmark indices in the month gone by and formed a good amount of mixed positions. Rollovers in banking index stood at 82.59 percent which is much higher than its 3-month average rollovers of 70.51 percent.

The open interest has also increased by 29.89 percent on a month-on-month basis which indicates that a blend of long and short positions got rolled to May series.

On the Nifty options front, 11000 call option is attracting trader’s attention; while 10500 – 10300 put options has added huge positions.

Considering the overall options activity, 10400 – 10800 would be a broader range for the Nifty in May series.

Stocks to watch in May series:

On stock front, good amount of long positions got rolled in stocks like MindTree, NIIT Tech, Tata Elxsi, DCB Bank, Nalco, etc.

While counters like PC Jeweller, Reliance Communications, HPCL, BPCL, IDEA and IDBI Bank, etc. had seen a huge correction in the last series and the shorts formed in these stocks got rolled to the May series as well.

MORE WILL UPDATE SOON!!

These top 10 stocks are likely to remain on traders’ radar in May series

Sectorally, IT sector was the centre of attraction for a major part of the April series as all the IT counters ended well in positive territory and they also added a huge amount of long positions.

  

Post a decent correction in preceding two months, April series kick-started on a positive note and with a good amount of short positions. The Nifty continued to make higher highs as the month progressed.

April month was completely dominated by the ‘Bulls’ as we witnessed positive closing in 15 out of 19 trading sessions of April series.

As a result, Nifty concluded the April F&O series a tad above 10600 mark, with a gain of around 5 percent over its penultimate expiry.

Sectorally, IT sector was the centre of attraction for a major part of the April series as all the IT counters ended well in positive territory and they also added a huge amount of long positions.

The Nifty has retraced about 50 percent of the fall seen in February and March. In this up move, we witnessed the formation of fresh long positions.

Rollovers in Nifty stood at 72.32 percent which was above its quarterly average in both percentage term as well as in term of net open positions, which indicates that the long positions formed in the last month got rolled to the next series ahead of Assemble Election in Karnataka.

However, some of the previous shorts, which got rolled from March series, are still intact in the system. Foreign institutional investors or FIIs, who were light on positions at the start of series, too participated well in the up move and as a result.

FIis 'Long Short Ratio' in index futures has moved higher from 18.20% (March expiry) to 54.40% (April expiry). At the same time, they sold equities worth around Rs. 8140 crores in last one month.

The BankNifty underperformed the benchmark indices in the month gone by and formed a good amount of mixed positions. Rollovers in banking index stood at 82.59 percent which is much higher than its 3-month average rollovers of 70.51 percent.

The open interest has also increased by 29.89 percent on a month-on-month basis which indicates that a blend of long and short positions got rolled to May series.

On the Nifty options front, 11000 call option is attracting trader’s attention; while 10500 – 10300 put options has added huge positions.

Considering the overall options activity, 10400 – 10800 would be a broader range for the Nifty in May series.

Stocks to watch in May series:

On stock front, good amount of long positions got rolled in stocks like MindTree, NIIT Tech, Tata Elxsi, DCB Bank, Nalco, etc.

While counters like PC Jeweller, Reliance Communications, HPCL, BPCL, IDEA and IDBI Bank, etc. had seen a huge correction in the last series and the shorts formed in these stocks got rolled to the May series as well.

MORE WILL UPDATE SOON!!

Will ‘sell in May and go away’ hold true for markets in 2018?

After a paltry average CAGR of 3% for the last 4 years, we are going to end FY 18 with an earnings growth of 10%. FY 19 promises even better, a very healthy 25% growth.

  

The April series ended with a flourish at 10,618, marking the highest close since February 5, 2018. This is significant as this is the highest close since the Nifty began making lower tops and lower bottoms. Immediate resistance now comes at 10,705 for the index.

This level marks the 61.8% retracement of the Nifty’s 1,220 points fall from 11,171 mark to 9,951. A close above the mark of 10,705 should be seen as an end to the current bearishness.

There is a market myth, propagated by some of the talking heads on TV that you can safely sell in May and go away. Coupled with this is another fear that in the month of May we have had instances of lower circuits in our markets in May 2004.

We have the Karnataka election results on May 15, which could make the bulls think twice before building longs.

Plus, on the global front, the fear that U.S. may re-impose sanctions on Iraq as the deadline of May 12 nears, which could trouble the markets further.

But before you think of selling in May and going away, just remember that of the 30 individual May months we have studied since 1990, it has fallen in only 12 and risen in 18, giving an average return of 0.62 percent.

Additionally, the average return of the year from January to April, in all 12 instances when the markets fell in May, the markets had risen 14 percent on an average. The year to date returns of the Nifty, are a paltry 0.83%.

Don’t fall into this trap

While selling in May and going away may be true for the U.S., it is certainly not a sound idea for India, no matter how fearful you may feel. Approach the month of May with an open mind.

Better Results

After a paltry average CAGR of 3% for the last 4 years, we are going to end FY 18 with an earnings growth of 10%. FY 19 promises even better, a very healthy 25% growth.

GST Numbers will only improve. For the month of March, the GST collections have been Rs 96,000 crore. The highest so far.

Along with better GST numbers, the E-way bill has been made compulsory from April. The number will only get better.

On the elections front, Karnataka is still a developing story. The markets are despondent on BJP’s electoral performance in Karnataka, especially after the Congress played its Lingayat card well.

We think for a market which is just licking its wounds inflicted by LTCG and FII selling is ignoring the positives and reading too much in the negatives.

It may be better to approach the month of May with an open mind rather than with preconceived notions of selling in May and going away.

MORE WILL UPDATE SOON!!

These 20 evergreen companies & rising star stocks are your best bet to make a multibagger portfolio

I-RoCE is more crucial than reported RoCE as it better reflects the management’s fresh capital allocation decisions and forms the crux of the efficiency test.

Return-hungry investors are always on the lookout for stocks that can offer value and at the same time promise future growth which remains elusive in most of the companies that have rallied in the past year.

To answer this, Edelweiss Securities in its second edition of Capital Conundrum series, handpicked 20 stocks based on incremental return on capital employed (I-RoCE) framework, which according to them, is a true reflection of the management ability to redeploy incremental capital at higher returns that is not clouded by past capital allocation decisions.

Further, I-RoCE companies can be categorised into two buckets: a) Evergreen – Companies improving or sustaining their high RoCE and b) Rising Stars–Companies with low historical RoCE, but moving up the curve.

  

What are 'Evergreen' and 'Rising Star' categories?

Evergreen: This category includes companies which are improving or sustaining high RoCE. The thumb rule is that RoCE should be greater than 20 percent of the 10-year average. Evergreen companies that have delivered & sustained high I-RoCE are rewarded by markets.

Under the Evergreen category, the companies which qualify the above criteria include names like Britannia Industries, Eicher, Pidilite Industries, Avanti Feeds, La Opala, TVS Srichakra Ltd, Atul, Kajaria, Sheela, and MRF.

  

Rising Stars: This category includes companies with low historical RoCE which is usually less than 20 percent of 10-year average, but are moving up the curve. Rising Stars are expected to emerge as winners going ahead and create substantial shareholders wealth.

The companies that make the list under the Rising Stars category includes TVS Motors, D-Mart, Heritage Foods, KPR Mills, CCL Products, Finolex Cables, Phoenix, Firstsource Solutions, Vardhman, and Nilkamal, said the Edelweiss report.

There are also companies that have moved from the Rising Stars category to the Evergreen category in the last five years. The probability of a Rising Star company moving to the Evergreen category in the following years, based on past five years’ back-testing analysis, is 40 percent, added the report.

  

MORE WILL UPDATE SOON!!

3 short-term stock buys which can offer up to 16% returns

At this juncture, 10640 – 10665 zone is a crucial hurdle for the Nifty and any sustainable move beyond this level will drive Nifty higher towards 10703 – 10736 which coincides with the weekly gap area.

   

The Nifty continued to trade in a narrow range of 10,540-10,630 as several factors restricted the rally. Sharp fall in the USD:INR pair, rise in bond yields and surge in crude oil prices were among the top reasons that kept indices rangebound throughout the week.

The Nifty made several attempts to surpass the crucial resistance of 10,640 levels. However, follow-up buying was clearly missing. On an hourly chart, we can see a complex bearish divergence, whereas the weekly RSI (14) is approaching 60 levels.

At this juncture, 10,640–10,665 zone is crucial hurdle for the Nifty and any sustainable move beyond this level will drive Nifty higher towards 10,703– 10,736 levels which coincides with the weekly gap area.

On the flip side, if the Nifty fails to cross and hold 10,640 levels and slides below 10,563 levels, we may see some correction in our market which could take the index towards 10,450–10,355 levels, respectively.

Short rollovers were seen in cement, capital goods, banking, NBFCs and oil & gas sector and that will keep markets under pressure, whereas sectors like technology, metal, pharma, and FMCG saw long positions getting rolled in May series.

From current levels, we don’t expect a big upmove in Nifty and any rally/short covering move towards 10,700-10,740 levels can be used to exit from long positions and initiate fresh shorts.

On the lower end, the level of 10,500 will act as immediate support for the Nifty, post which it can test 10,350-10,300 levels.

Here is a list of top 3 stocks which could give up to 16% return in the short-term:

Wockhardt: Buy at 795| Target 900| Stop Loss 750| Timeframe 15 to 21 sessions| Return 13%

After consolidating near 200-SMA, the stock saw decent buying interest in the past few trading session. The move was also confirmed by the rising volume activity.

On the weekly chart, despite the sharp fall from 1012, the 9-45 EMA on price is positive and indicates that the current trend is still up.

The weekly RSI (14) indicates that stock is likely to resume its uptrend. We advocate traders to buy Wockhardt at the current level of Rs795 with a price target of Rs900 and a stop loss placed below Rs750.

Maruti Suzuki India Ltd: Sell around 9000| Target 8300| Stop loss 9350|Timeframe 15 to 21 trading sessions| Return 7%

Maruti Suzuki has been under pressure since past few trading sessions as stock resumed its medium-term downtrend. Recently, the stock confirmed its breakdown on daily RSI (14) which doesn’t bode well for bulls.

Also, the daily, as well as the weekly RSI, has a signal shift in a range. Hence, we expect a further correction in this stock and recommend traders to short Maruti around 9000 levels with a price target of 8300. Stop loss should be placed at 9350 on a closing basis.

SAIL: Sell around 77 – 78| Target 63| Stop loss 81.50| Time frame 15 to 21 trading session| Return 16%

Last week, stock rested the neckline drawn from its previous support zone which was broken during early March 2017. In line with expectation, stock witnessed decent sell-off and in that pessimism, sail confirmed its breakdown from down sloping trend line drawn from its recent swing low of Rs67.15.

The said breakdown was confirmed by the daily RSI (14) which support our hypothesis. Hence, we expect the resumption of downtrend in this stock, therefore, advice traders to sell this stock in a range of Rs 77 to Rs 78 with a price target of Rs 63. A stop loss should be placed above Rs 81.50.

MORE WILL UPDATE SOON!!

Volatility to rise ahead of April expiry; 3 stocks which return up to 12%

The Nifty50 has been making higher highs higher lows on a weekly scale, with support seen around 10,560 levels and then 10,485 levels which indicates a continuation of the uptrend is still intact.

  

The Nifty 50 managed to close on a positive note for the second straight day backed by earnings boost. After making a cautious start, amid weak global cues, markets traded in red terrain for the most part of the day.

But, it finally managed to close above the 10,600 mark forming a bullish candle pattern on the daily scale. The Relative Strength Index – RSI on the Daily Chart is at 65.42 showing an upward momentum.

The MACD is also trading above the zero line with positive crossover, which indicates that the bias could remain bullish for the next few trading sessions. India VIX fell by 9.51 percent at 11.89. A decline in VIX suggests limited downside and a consolidation.

The Nifty50 has been making higher highs higher lows on a weekly scale, with support seen around 10,560 levels (50 percent retracement of January to March downfall) and then 10,485 levels (mid-band of Bollinger band), which indicates a continuation of the uptrend is still intact.

In the mid-term Nifty has potential to move towards 10,705 levels (61.8 percent retracement of January to March correction) and then 10,981 levels (upper band of Bollinger band).

On the Options front, maximum Call open interest of 45.02 lakh contracts is seen at strike price 10,700, followed by 11,000, which now holds 31.09 lakh contracts and maximum Put open interest of 49.64 lakh contracts is seen at strike price 10,500, followed by 10,400 which now holds 40.47 lakh contracts.

As per the option data, the support level in Nifty has shifted higher in the April series compared to last week and the immediate support seen around 10,500-10,400 levels whereas 10,700 will act as a major hurdle.

Here is a list of top 4 stocks which could give up to 11% return in the short term:

Dalmia Bharat: BUY | Close: Rs 3004 | Target: Rs 3350 | Stop loss: Rs 2770 | Return: 11.52%

Post the correction in January, the stock slipped into consolidation mode. After three and a half months, the stock has given a breakout from this congestion zone with higher volumes.

The daily indicators such as Relative strength index (RSI) and MACD are in buying mode. We expect the stock to extend this rally towards our mid to long-term target of Rs 3350 with a stop loss below Rs 2770 on a closing basis.

Cadila Healthcare: BUY | Close: Rs 404.90 | Target: Rs 452 | Stop loss: Rs 380 | Return: 11.6%

After making a marginal consolidation, the stock has given a breakout from symmetrical triangle pattern above Rs 393-394 levels on Monday.

Volumes during this price action were almost double to its average daily volumes, indicating strong buying interest after this breakout.

The Relative strength index (RSI) is making the higher bottom and higher top and MACD is trading with a positive crossover whereas (+) DI just cross above (-) DI, which indicates that the stock has the potential to move higher.

Traders can buy the stock around current levels and add on dips around Rs 396-399 with a stop loss below Rs 380 (closing) for a target of Rs 452.

Sterlite Technologies: BUY | Close: Rs 354.85 | Target: Rs 392 | Stop loss: Rs 329 | Return: 10.42%

In daily scale, the stock has given a breakout from the Ascending Triangle pattern above Rs 342-344 levels on Monday with higher volumes than its daily average volumes.

The Relative strength index (RSI) found support on its twenty days average and pointing upwards whereas MACD is trading with positive crossover.

Based on the above observations, traders can buy the stock in the range of Rs 350-355 with a stop loss below Rs 329 (closing) for a target of Rs 392.

Yes Bank: BUY | Close: Rs 324 | Target: Rs 360 | Stop loss: Rs 302 | Return: 11.11%

In the daily scale, the stock has formed an Inverse Head and Shoulders pattern and gave a breakout above its neckline of Rs 320-321 levels with higher volumes, indicating strong buying interest.

The Daily Relative Strength Index (RSI) is showing an upward momentum and the MACD is trading with positive crossover whereas (+) DI trading above (-) DI from last seven trading days.

Based on the above observations, the stock is likely to head higher in the near to mid-term. Positional traders can buy the stock in the range of Rs 322-324 with a stop loss below Rs 302 (closing) for the target of Rs 360.

MORE WILL UPDATE SOON!!

These 4 technical short-term stocks could make you richer by 11%

The F&O expiry week and negative divergence coupled with small real bodies sharp and sudden corrections cannot be ruled out.

   

The Nifty 50 index has entered into a sideways consolidation phase as it is approaching resistance of 10,640 being the recent peaks. The Upper end of the range is placed at 10,600-10,640 and the lower end of the range is placed at 10,500 levels.

Failure to cross this resistance can lead to corrections to levels of 10,430-10,320. However, a breakout above 10,640 can take the Index to 61.8 percent Fibonacci retracement level placed at 10,718 and 78.6 percent Fibonacci level placed at 10,925.

Moreover, within the trading range, the real body movements are diminishing suggesting lack of participation. On the shorter time frame, RSI has started forming negative divergences suggesting maturing uptrend.

Therefore, keeping in mind, the F&O expiry week and negative divergence coupled with small real bodies sharp and sudden corrections cannot be ruled out.

Here is a list of top three stocks which could give up to 12% return in 3-4 weeks:

ICICI Prudential Life Insurance: Rating: BUY | Target: Rs 445 | Stop loss: Rs 363 | Return: 6%

On the weekly chart, ICICI Prudential Life Insurance is on the verge of a breakout from a channel pattern placed at Rs 395 after taking support at the 89 percent Fibonacci retracement level placed at Rs 370 (as indicated on chart). A sustained trade above Rs 395 can trigger a breakout from the channel resuming uptrend.

On the daily chart, the stock has formed a sizeable bullish candle with healthy volumes suggesting higher levels in the coming trading sessions.

Moreover, RSI has witnessed a range shift after taking support at the 40-level entering the bull zone affirming bullishness. The stock may be bought in the range of Rs 385-390 for targets of Rs 425-445, keeping a stop loss below Rs 362.

Caplin Point Laboratories: Rating: BUY | Target: Rs 675 | Stop loss: Rs 560 | Return: 12%

On the weekly chart, Caplin Point Laboratories is on the verge of a breakout from the channel pattern placed at Rs 633. Breakout with healthy volumes can trigger a bear trend reversal.

On the daily chart, stock has broken out from a Pennant pattern after taking support at the 50 percent Fibonacci retracement level suggesting further upside in the stock.

The RSI has turned upwards breaking out of the upper Bollinger Bands suggesting extended bullishness in the coming trading sessions. The stock may be bought in the range of Rs 596-602 for targets of Rs 655-675, keeping a stop loss below Rs 560.

Cadila Healthcare: Rating: BUY | Target: Rs 450 | Stop loss: Rs 370 | Return: 11%

On the weekly chart, Cadila Healthcare has turned upwards after taking support at the 50 percent Fibonacci retracement level placed at Rs 382 indicating higher levels in the coming trading sessions. Further, a sustained trade above Rs 403 can extend the uptrend taking it higher.

On the daily chart, the stock has broken out from a consolidation phase on good volumes confirming the bullishness building up in the stock. The RSI has entered in the bull zone after bearing out of broken out from upper Bollinger Band.

MORE WILL UPDATE SOON!!

Short sellers are on back foot; top 3 stocks which could give up to 12% return

As we are heading towards April expiry with two trading session left, the short sellers seem to be on back foot as they still holding outstanding short positions.

  

On every dip, we have been continuously seeing short covering in the Nifty as Call Writers are covering their positions which in turn supporting upside movement in prices.

In the recent weeks, we have observed that put writers are continuously shifting towards the higher band which signifies limited downside in the market ahead of expiry.

Furthermore, we also anticipate that more short covering can be seen in coming sessions which can lead Nifty towards 10,700 on the day of expiry.

The initial rollover data also indicates long rollover to May series. On the technical front, 10,580 spot level should act as support while 10,750 will be the immediate hurdle.

Here is a list of top three stocks which could give up to 12% return in short term:

AU Small Finance Limited Bank : BUY| Target Rs 775| Stop Loss Rs 640| Return 12%

The smart recovery has been seen in prices in recent weeks. The stock held back above its 200 days exponential moving average (DEMA) on the daily interval. Since past few weeks stock has been seen consolidating in range of Rs 680-650.

However, in Tuesday’s session, a fresh breakout in prices along with hefty volumes pushed the stock to surpass its recent resistance levels.

Additionally, the stock has also given a breakout above the Cup and Handle formation which can be visible on a daily interval. So, traders can accumulate the stock in a range of Rs 695-690 levels for the target of Rs 775 with a stop loss below Rs 640.

Praj Industries Limited: BUY| Target Rs 107| Stop Loss Rs 89| Return 12%

On the daily charts stock has formed double bottom formation around 80 levels and bounce back sharply to once again regain the momentum above its 200 days exponential moving average.

In addition, the stock has also formed inverted head and shoulder formation on daily charts and is on verge of a breakout above its neckline.

The positive divergence on secondary indicators are supporting the up move in prices along with multiple supports at its short and long-term moving averages. The traders can accumulate the stock in a range of Rs 95-98 for the upside target of Rs 107 with a stop loss below Rs 89.

SBI Life Insurance Company Limited: BUY| Target Rs 822| Stop Loss Rs 695| Return 11%

Ever since the stock has listed on the stock exchange it is trading in a broader range of Rs 625-725. The consolidation has been seen for more than six months.

However, in Tuesday’s session finally, the bulls took control over the prices as the stock has witnessed a consolidation breakout above the Rs 720 levels with hefty volumes.

Moreover, on the daily interval stock has also given a breakout above the ascending formation which is generally traded as a bullish pattern.

The traders can accumulate the stock in a range of Rs 746-740 levels for the upside target of Rs 822 with a stop loss below Rs 695.

MORE WILL UPDATE SOON!!

Dolly Khanna adds 4 stocks in Q1 CY18, has 8 multibaggers that rose over 100% in 2017

Dolly’s portfolio has more winners than losers. More than 80 percent of the stocks gave positive returns, with eight stocks rising more than 100 percent in the last one year.

One normally associates successful couples in the same profession with lawyers, doctors and even filmstars. But stock market? Yes, that too has one. Chennai-based Dolly and Rajiv Khanna are a couple to beat. Few can rival their ability to spot value small-cap or mid-cap marvels. Dolly counts as one of the top analysts in the fraternity of value pickers in India.

Rajiv started investing in the market in 1996 with an initial investment of Rs 1 crore, which is now worth over Rs 750 crore, according to reports. Their portfolio would also include other companies in which the duo holds less than 1 percent stake.

The two have a knack of spotting multibagger stocks and know when to book profits and when to increase stake in companies offering value after a  correction.

During the March quarter, the duo reduced stake in nine out of 20 companies in which they held more than 1 percent stake. But they continue to hold more than 1 percent stake in each of these nine companies after the sale.

Stocks in which the Khannas reduced their stake include names like Dwarikesh Sugar, Gujarat Narmada, Nitin Spinners, NOCIL, RSWM, Ruchira Papers, Sterling Tools, PPAP Automotive and Thirumalai Chemicals.

The couple added 4 new stocks to their portfolio, namely Associated Alcohols & Breweries, LT Foods, Radico Khaitan, and Som Distilleries and Beverages.

   

The duo added shares of three distillery companies during the recently-concluded quarter. These stocks have given stellar returns in the last one year, having risen around three times. Radico Khaitan rose 237 percent, Associated Alcohols 185 percent, and Som Distilleries rallied 108 percent in the last one year.

Associated Alcohols is a liquor manufacturer and bottles vodka and Scotch whisky for international brands.

Radico Khaitan makes various brands of whisky and rum, including 8 PM, Royal Whytehall, After Dark Whisky, Contessa Rum and 8 PM Bermuda Rum, among others. Som Distilleries & Breweries manufactures beer and whiskys.

Dolly has always been an active trader and believes in playing the momentum game. This is evident from the fact that she has either bought or sold some part of the holding in all the 20 stocks listed in her portfolio.

   

She added four stocks to her portfolio in the quarter ended March but exited or reduced her stake to less than 1 percent in four companies --  Dhampur Sugar Mills, Emkay Global, IFB Industries, and Nandan Denim, according to data available on April 20.

Dolly’s portfolio has more winners than losers. More than 80 percent of the stocks gave positive returns, with eight stocks rising more than 100 percent in the last one year. Only four of the 20 stocks gave a negative return over the same period.

Some of the stocks, other than the three beer and spirit makers that rose more than 100 percent each, include Rain Industries (up 226 percent), Thirumalai Chemicals (up 167 percent), and Butterfly Gandhimathi (up 164 percent), among others.

Four stocks that ended in the red include Dwarikesh Sugar (down 48 percent), Nitin Spinners (down 24 percent), RSWM (down 24 percent), and Ruchira Papers (down 2 percent).

MORE WILL UPDATE SOON!!

Looking for small and midcaps? Top 6 stocks to buy in the April expiry week

Midcap and smallcap indices rose over a percent each this past week, outperforming the headline index, and there are some stocks that investors can look at buying this week.

   

Midcap and smallcap indices rose over a percent each this past week, outperforming the headline index, and there are some stocks that investors can look at buying this week.

The Nifty rose 0.6 percent in the week ended April 20. However, price appreciation was on tepid volumes accompanied with a reduction in the daily price change as the week advanced, indicating lack of participation and maturing pullback rally.

Thin volumes, small real bodies and failure to sustain above 10,640 in the coming week can resume the corrections, dragging the index lower to levels of 10,380-10,300.

Definitely, when a stock trades above the 200-DMA, that’s a healthy sign, a sign of strength. However, only 200-DMA does not provide the complete health score of a stock.

One should also look at the chart patterns along with Dow Theory, which says indices must confirm each other and volumes must confirm the trend.

Technical indicators like RSI, MACD also provide fruitful insight in identifying start and termination of trends. Therefore, one should look at a combination of few filters before initiating a trade, but the idea is to keep it simple and not look at multiple indicators at the same time.

Midcap and smallcap indices over 1 percent each this past week, outperforming the headline index. Both indices have recovered from their oversold territory. However, they are still trading below the 50 percent and 61.8 percent Fibonacci retracement levels.

In a typical counter-trend pullback, rally indices/stocks tend to reverse from these retracement levels (i.e. 50 percent and 61.8 percent). If both indices fail to trade beyond these retracement levels corrections can resume.

Therefore, investors should look to book profits in the midcap and small stocks on rallies to these retracement levels. However, there are few individual stocks within the midcap and smallcap space that can be bought, to name a few.

1) Amara Raja Batteries

2) Apollo Hospitals

3) Biocon

4) Century Plyboards

5) Cochin Shipyard

6) DCB Bank

 What should be the ideal strategy of investors for expiry week?

A) As per options open interest data, Nifty is expected to remain range-bound within 10,500-10,600 levels in the coming week, which happens to be the April F&O series expiry week.

Investors can use this range to take long and short trades accordingly. Alternatively, they can opt for a short strangle strategy.

3 positional calls are as follows:

Avanti Feeds: BUY| Target Rs 2,900

The stock is on the verge of a breakout from a falling channel resistance placed at Rs 2,400. A sustained trade above this resistance with healthy volumes can resume the uptrend taking it to levels of Rs 2,700-2,900.

Further, RSI has turned upwards from its previous support zone of 43, currently trading above the 50 level suggesting higher levels in the coming trading sessions.

ITC: BUY| Target: Rs 320

The stock formed a sizable bull candle with healthy volumes indicating bullishness in the stock. Further, it has closed above the midpoint of the channel and its nine-weeks high of Rs 275.

On the monthly time frame, RSI has turned upwards from the neutral level of 50 suggesting higher levels in the coming trading sessions. A sustained trade above Rs 275 can extend the up move to levels of Rs 290-320 being the GAP area.

REC: BUY| Target Rs140

The stock is on the verge of a breakout from an Ascending Triangle consolidation suggesting a bear trend reversal on cards. A sustained trade above Rs 132 with healthy volumes will trigger a breakout from the pattern taking it to levels of Rs 136-140.

Further, RSI has formed a positive divergence indicating higher levels in the coming trading weeks.

MORE WILL UPDATE SOON!!