Nifty likely to head towards 10,500; 3 stocks which could give up to 11% return

The Nifty has also given a breakout from small bullish Inverse head and shoulder on the daily charts. The target for this pattern comes at 10500 odd levels.

   

By closing above the 10208 level on Monday, the Nifty has confirmed higher top and higher bottom formation on the daily charts for the first time since the correction, which started from January 2018.

The Nifty has also given a breakout from small bullish Inverse head and shoulder on the daily charts. The target for this pattern comes at 10500 odd levels. The Nifty also managed to close above its 200-day SMA which is currently placed at 10183 level.

Moreover, Nifty has already witnessed a fall of almost 11 percent from the all-time high of 11171 registered in January 2018 to the recent bottom of 9951.

The Nifty Midcap and Smallcap indices plunged 16% and 21% respectively from the all-time high to recent low. Many stocks have seen a fall of than 40% from their 3-month’s high.

Few oscillators like RSI and KST have formed positive divergence. This means price levels were making lower bottoms and oscillators were making higher bottoms, indicating that dominance of bears is gradually going down.

Moreover, many stocks from midcap and small-cap segment look extremely oversold on charts and pullback from these levels is expected to continue.

From the derivative side, we are starting the April series with lower Stock Futures’ Open Interest (Four month Low) which in turn indicates lower leveraged positions, which Augurs well for the markets for the days to come.

Amongst the Options, Highest put writing is seen at 10000 level indicating 10000 level to act as a strong support for the coming days.

Considering the evidence discussed above, our advice would be to accumulate long positions with the stop loss of 10000 levels with a target of 10500 levels.

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

Surya Roshni Ltd: BUY| Target Rs. 435 | Stop-loss Rs 380 | Return 8%

Surya Roshni reversed northwards after forming multiple Bottoms around 360 levels to close above its 5-DMA with a surge in volumes.

The stock price is also on the verge of giving bullish breakout by closing above the downward slopping trendline, adjoining the highs of 09-February-2018 and 15-March-2018.

We believe, this recent price fall of 22% from the all-time high is a running correction in overall bullish trend. Therefore, we recommend buying Surya Roshni for the upside target of 435, keeping a stop loss at 380.

Manappuram Finance Ltd: BUY| Target Rs. 120 | Stop-loss Rs 108| Return 7%

Manappuram Finance Ltd has given a breakout on the daily chart by closing above the multiple resistance level of 110 levels. The stock has been holding well in the recent correction and also holds bullish trend on the monthly chart.

The stock price is trading above its 20, 50, 100 and 200-SMA, which indicates bullish setup for medium to long-term charts.

The momentum indicators and Oscillators are also showing strength in the stock. Therefore, we recommend buying Manppuram Finance for the upside target of 120, keeping a stop loss below Rs108.

Hind Oil Exploration (HOEC): BUY| Target Rs. 128 | Stop-loss Rs 110 | Return 11%

After forming triple bottom around 100 levels, HOEC reversed northwards to close above its 5 and 20-DMA with higher Volumes.

The stock price is also making higher top higher bottom formation on the daily chart, Indicating bullish trend. It is also on the verge of giving bullish trendline breakout by closing above the downward sloping trendline, adjoining the highs of 12-January-2018 and 22-March-2018.

The momentum indicators and Oscillators like MACD and RSI are also showing strength in the stock. Therefore, we recommend buying HOEC for the upside target of 128, keeping a stop loss below at 110.

MORE WILL UPDATE SOON!!