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!!