Podcast | Stock Picks of the Day: 3 buy & sell ideas that could return 11-17% (2024)

"10,929 will act as strong resistance and only a weekly close above this level will negate the bearish candle. On the flip side, 10,710 will act as immediate support, followed by 10,620," says Aditya Agarwal of Way2Wealth Brokers.

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Aditya Agarwal

The Nifty eventually conquered 10,800 on a closing basis in Tuesday’s trading session. However, follow-up buying was clearly missing.

The 25-bps rate hike by the Federal Open Markets Committee somehow hurt bullish sentiment and the Nifty slipped below the 10,800 mark during Wednesday’s trade.

On the daily chart, we are seeing a bearish divergence formation. The relative strength index (14) is struggling near 60 levels. On the weekly chart, the Nifty has formed a bearish engulfing pattern mid-May, with the candle high pegged at 10,929.

Hence, 10,929 will act as strong resistance and only a weekly close above this level will negate the bearish candle. On the flip side, 10,710 will act as immediate support, followed by 10,620.

Options data indicate stiff resistance between 10,900 and 11,000. Maximum call writing has been seen at 10,900 and 11,000 strike options. So, this 100 points range will continue to act as supply zone for the Nifty in the short to medium term.

On the lower side, put writing has shifted from 10,500 to 10,700 strike options. This indicates that the players are not expecting the Nifty to breach 10,700 in the near term.

For the next few trading sessions, we expecting the Nifty to trade between 10,680 and 10,940. A move towards the higher side of the range can be used to book profits in long positions.

Here is a list of top three stocks that could return 11-17%:

Bharat Petroleum Corporation: Sell | LTP: Rs 416.35 | Target: Rs 346 | Stop loss: Rs 440 | Time frame: 15 to 21 sessions | Return 17%

BPCL has been in a strong downtrend since past several weeks and in that pessimism, the stock hit a low of Rs 360 during late May 2018. Subsequently, it saw a pullback from an oversold zone and climbed above Rs 400 mark.

Last week close coincided with the June 23, 2017 close which was acting as a strong support. However, post the breakdown such level should reverse its role and now should prove as stiff resistance.

Also, stock retraced 61.8% of its entire move from the top of Rs 454.50 to the bottom of Rs 360. On a daily chart, RSI (14) comes near 60 levels and is struggling to cross such levels with this weekly RSI (14) is also indicating a negative reversal.

Considering the above evidence, we advocate traders to short this stock in a range of Rs 410 to Rs 416 with a price target of Rs 346. Stop loss should be placed at Rs 440 on a closing basis.

Chennai Petroleum Corporation: Sell | LTP: Rs 302.75 | Target: Rs 262 | Stop loss: Rs 325 | Time frame: 15 to 21 trading sessions | Return: 13%

Chennai Petro is in a protracted downtrend and in that pessimism stock hit a fresh 52-weeks low of around Rs 262. Subsequently, it saw a decent pullback in past few weeks but on higher side is facing stiff resistance near Rs 310-317 zone which coincided with its previous support zone.

Also, the 50percent retracement of its previous swing move comes near Rs 310. Hence, we recommend traders to go short in a range of Rs 307 to Rs 310 with a price target of Rs 262 and Stop loss placed above Rs 325.

Divi’s Laboratories: Buy | LTP: Rs 1,084 | Target: Rs 1,210 | Stop loss: Rs 1,010 | Time frame: 15 to 21 trading sessions | Return: 11%

On the daily chart, Divis Lab has formed a strong base near Rs 1020 zone which coincided with the daily 200 DMA and started moving higher. During last week, the stock formed a ‘Doji’ candle precisely at weekly 45-EMA.

The Higher Top Higher Bottom formation on the weekly chart is intact. Hence, we believe the stock is likely to resume its uptrend and therefore advice traders to buy this stock in a range of Rs 1080 to Rs 1070 with a price target of Rs 1210. A stop loss should be placed at Rs 1,010 below which our bullish view will be negated.

Disclaimer: The author Head of Technical Research, Way2Wealth Brokers Pvt. Ltd. The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Moneycontrol News

first published: Jun 15, 2018 08:51 am

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