For the week, Axis Securities expects the index to trade in a 10,550-10,820 range.
On the weekly chart, the index has formed a Doji candlestick formation, indicating indecisiveness among market participants regarding the market’s direction. Since the past seven weeks, the index has been consolidating within the 10,500-10,820 range, which represents a short to medium term sideways trend.
Any decisive breakout on either side will provide direction to the market. The chart pattern suggests that if the Nifty crosses and sustains above 10,770 levels, then buying interest would lead it towards 10,820-10,900 levels. However, if the index breaks below 10,640 levels, then it would witness selling which could take it towards 10,500-10,550 levels.
The Nifty is well placed above its 20, 50 and 100-day simple moving average (SMA), indicating positive bias in the short term. It continues to remain in an uptrend in the short term, so buying on dips continues to be our preferred strategy. For the week, we expect the index to trade in a 10,550-10,820 range.
The rollover cost in May series stood at 0.09 percent as compared to 0.3 percent in the previous expiry, which indicates that most short positions have been rolled over while long positions have not been rolled over. Highest call open interest addition was seen in 11,000 strikes, which is likely to act as a hurdle on the higher side. At the money put 10,600 saw OI on the first day of the June series which indicates that we may break below 10,600 before moving up.
If we look at the overall market, stocks in select pockets are performing well and the index is holding up because of heavyweights like HDFC Bank, Infosys, Mahindra & Mahindra, Bajaj Finance and Ashok Leyland. Most stocks are under pressure and have faced significant corrective action as they failed to meet market expectations on their quarterly result.
Investors should not average stocks that are hitting 52-week lows at the current juncture. Looking at the macro picture, we feel there would be more short term downside in these stocks. We are advising investors to book profits in stocks that are hitting 52-week highs as we expect some profit-booking and consolidation in the market going forward.
Midcap and smallcap stocks generally perform in a healthy market. In the last two months, we are witnessing high volatility due to domestic and global cues which is creating uncertainty among investors. We believe smallcap and midcap stocks are likely to underperform for some more time, so booking profits on rallies would be advised..
Please share 3-5 positional calls that could offer handsome returns to investors in the next 1 month?
A) Here is a list of top three stocks that could offer 6-7% returns in the next one month:
Torrent Pharma Ltd: CMP: Rs 1,438| Buying Range: Rs 1,430-1,400| Target: Rs 1540| Stop loss Rs 1375| Return 7%
On the weekly chart, the stock has observed a ‘Down Sloping Trendline’ breakout at Rs 1,420 on closing basis which signals a change of trend towards the upside.
This breakout is accompanied with high volumes indicating increased participation. The stock is currently trading above all its crucial SMA i.e. 20, 50, 100. The RSI and Stochastic are also in the positive terrain.
BPCL: CMP: Rs 408.55| Buying Range: Rs 408-400| Target: Rs 430-437| Stop loss: Rs 391| Return 7%
BPCL has given a downward sloping trendline breakout at Rs 400 which was also the immediate acting resistance in the stock and went on to make a high of Rs 411.50 on a closing basis.
The stock is witnessing high volume along with the support placed at 20 and 50-days SMA. The momentum indicators are also signaling a positive probability towards the bullish momentum in the stock.
Godrej Consumer Products: CMP: Rs 1,163.90| Buying Range: Rs 1,163-1,145| Target: Rs 1,230| Stop loss: Rs 1,115| Return 5.6%
Godrej CP has given the breakout from its last five weeks consolidation range of Rs 1,150-1,070 on the weekly closing basis. This breakout is accompanied with high volumes indicating increased participation.
The stock is forming higher top higher bottom formation on daily/weekly charts indicates sustained uptrend. The strength indicators are in positive territory which indicates positive momentum to continue further.
MORE WILL UPDATE SOON!!
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