Avoid averaging stocks that are hitting 52-week lows: Axis Securities

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!!

Top 10 expert moneymaking ideas for the short term

The Nifty closed last week with a positive bias, but below its crucial level of 10,700, which suggest that bears are not ready to give up yet. The index is likely to consolidate in a range in June series as we head towards two crucial events: Monetary Policy Committee and US Federal Reserve policy meetings.

  

Investors are advised to remain cautious and watch out for two levels: 10,770 on the upside and 10,550 on the down. A breach of either could lead to a breakout or a breakdown. Until then, it is best if investors can remain stock-specific.

The index has made an indecisive pattern - Spinning Top - on the weekly chart and registered a Doji kind of formation on the monthly chart.

Since the past seven weeks, the Nifty has been consolidating between 10,820 and 10,500 levels, representing a short to medium term sideways trend.

Any decisive break 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 it would witness buying interest which would lead the index towards 10,820-10,900 levels.

If it breaks below 10,640 levels, he sees the index heading towards 10,550-10,500 levels. For the week, we expect the Nifty to trade in the range of 10,820-10,550 with a mixed bias.

Here is list of top 10 expert stocks ideas that could return 3-14 percent in the next 1-2 months:

Ujjivan Financial Services Limited: Buy| Target: Rs 450| Stop loss: Rs 365| Return 14%

The stock closed at Rs 393.80 on 1st June, 2018. It made a 52-week low at Rs 285 on 4th August 2017 and a 52-week high of Rs 434.75 on 11th May 2018. The 200-days exponential moving average (EMA) of the stock on the daily chart is currently placed at Rs 373.66.

Short term, medium term and long term bias is looking positive for the stock as it is comfortably trading above 200DEMA. Moreover, it is likely to form an “Inverted Head and Shoulder” pattern on weekly charts which is bullish in nature.

Apart from this, the technical indicators such as RSI and MACD are also suggesting buying for the stock. Therefore, one can buy in the range of Rs 385-389 levels for the upside target of Rs 440-450 levels with a stop loss below Rs 365.

Pfizer: Buy| LTP: Rs 2,565| Target: Rs 2,855| Stop loss: Rs 2,405| Return 11%

Among all the pharma stocks, this stock has performed very well during the last few sessions. On the daily chart, the prices are above the 20-DEMA indicating a strong trend in the coming sessions.

Further, the 'RSI' on the daily chart is in an upward direction which indicates a positive bias. Also, on the weekly chart, prices have taken a strong support at 10-DEMA which indicates an uptrend.

In addition, if we try to analyze ‘Bollinger Bands’ it clearly reflects bullish stance on the counter. Considering all the above scenarios, we recommend buying this stock at current levels for a target of Rs 2,855 over the next one month, and a stop loss should be fixed at Rs 2,405.

KPIT Technologies Ltd: Buy| LTP: Rs 285.75| Target: Rs 319| Stop loss: Rs 266| Return 11.6%

On the weekly chart, the stock price is trading well above the 10-DEMA & 50-DEMA which reflects a positive bias. The stock is trading near its all-time high which shows its outperformance in the recent market turbulence.

Prices have resumed its uptrend after sideways consolidation which signals upside movement. Also, among the oscillators, stochastic is in rising direction and in the overbought zone with a reading of around 94.

Thus, we recommend buying this stock at current levels for a target of Rs 319 over the next one month. The stop loss should be fixed at Rs 266.

Dabur Ltd: Buy| LTP: Rs 386.75| Target: Rs 427| Stop loss: Rs 364| Return 10.4%

The stock seems to be enjoying its multi-year bull run and price-wise, the stock price is trading well above 10-DEMA indicating bullishness in the counter. The stock is trading near all-time high which shows its outperformance in the recent market turbulence.

Further, if we try to analyze 'Bollinger Bands', it clearly goes with our bullish stance on the counter. Considering all above scenarios, a strong upside from current levels cannot be ruled out.

Thus, we recommend buying this stock at current levels for a target of Rs 427 over the next one month, and the stop loss should be fixed below Rs 364.

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.

Hero MotoCorp: Buy| Target: Rs 3,749| Stop loss: Rs 3,500| LTP: Rs 3,623.75| Return 3%

After retracing 50 percent of its rally from the recent lows of Rs 3,445 this counter appears to have resumed its up move after hitting a low of Rs 3,528.

The momentum in this counter shall pick up once it manages a close above Rs 3,624 paving way for a swift up move towards Rs 3,700 levels.

Hence, positional traders are advised to buy into this counter for a target of Rs 3,749. A stop-loss suggested for the trade is below Rs 3,500.

Reliance Industries: Buy| Target: Rs 970| Stop loss: Rs 900| LTP: Rs 929.20| Return 5%

Albeit this counter has underperformed in the recent past, it appears to have formed a decent base around Rs 900 levels from the cushion of which it is bounced back.

On resumption of the up move, it can make an attempt to test the gap down area of Rs 974 – 976 registered on 16th of May. Hence, positional traders are advised to buy into this counter for a target of Rs 970 and a stop loss below Rs 900.

HCL Technologies: Buy| Target: Rs 997| Stop loss: Rs 885| LTP: 906.40| Return 10%

This counter appears to be in a consolidation mode, around Rs 900 levels after the recent correction from the highs of Rs 1,108 registered in April.

As bottom appears to be in place around Rs 887 sooner than later it should resume its up move as the entire sector is looking positive. A minimum target of Rs 997 is possible because it is 50 percent retracement of the entire fall from the top of Rs 1,108 to Rs 887.

As risk-reward ratios are favorable, positional traders should make use of this opportunity to go long on the stock with a stop below Rs 885 for an initial target of Rs 997.

MORE WILL UPDATE SOON!!

Nifty upside capped at 10,790;Ideas that could return up to 12%

We expect the Nifty to remain range bound on a weekly basis, with the upside and downside capped at 10,790 and 10,570 levels, respectively.

 

The Indian equity market continued to trade sideways during the week gone by in the backdrop of May series expiry and several other domestic and global developments.

The Nifty marginally gained momentum after it breached the crucial level of 10,600 on the downside last week, but managed to touch a high of 10,764 on the weekly chart. Despite a positive momentum, it has failed to hold this level on Friday as it closed at 10,696, a gain of about 0.86 percent on a weekly basis.

After forming a bullish candlestick pattern on the Thursday’s price chart, the Nifty formed a bearish pattern on Friday, although no major formation was seen on a weekly basis. Its weekly relative strength index (RSI) stood at 58, indicating no price divergence, while moving average convergence divergence (MACD) indicated bullishness as it continued to trade above the ‘Signal Line’.

The market is likely to trade sideways ahead of the Monetary Policy Committee’s meet this week and take direction from the outcome. Any weak global sentiment is also likely to weigh on the market as witnessed in the past few sessions last week.

Hence, we advise investors to be stock-specific, applying a strict stop-loss on a trailing basis. We expect the Nifty to remain rangebound on a weekly basis, with the upside and downside capped at 10,790 and 10,570 levels, respectively.

Here is a list of top stocks that could deliver 4-12 percent returns in the short-term:

Bodal Chemical Ltd: Buy | Target: Rs 161 | Stop-loss: Rs 132 | Return 12%

Bodal Chemical witnessed a sharp correction in the last six-month from Rs 172 levels towards Rs 114-111 zone where it formed two consecutive bottom trend-channel which indicated a strong support.

Recently, it witnessed a strong upward momentum where it made two higher peaks after breaching its 20-days EMA level placed at Rs 135 levels.

Substantially, the scrip also witnessed a strong volume growth on the weekly basis and formed a bullish candlestick pattern on the weekly price chart with about 13 percent gain in same period despite closing lower on Friday.

The weekly RSI level up at 55 coupled with positive divergence on MACD which indicates a buying regime at the current level.

The scrip has a support placed at Rs 114 levels and resistance level at Rs 172. We have a buy recommendation for Bodal Chemicals which is currently trading at Rs. 143.60

KPIT Technologies Ltd: Buy | Target: Rs 303 | Stop-loss: Rs 273 | Return 6%

KPIT Technologies continued to trade on positive trajectory throughout the week despite a weak market breath and managed to breakout from crucial moving average level placed at 267.

Although the stock witnessed a minor correction to trade below Rs 247 levels but made a strong rebound to make the fresh higher peak. The scrip also witnessed a sharp volume buildup indicating a sustained trend.

The scrip formed a solid bullish candlestick pattern on its weekly price chart indicating upward momentum. Further, a secondary momentum indicator witnessed a revival with weekly RSI level continuing in buying zone coupled with a positive cue on MACD.

The support level for scrip is currently placed at 262 and resistance level at Rs 315. We have a Buy recommendation for KPIT Technologies which is currently trading at Rs 285.75

 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!!