As the countdown towards the implementation of goods & services tax (GST) begins, D-Street has a busy week ahead. The market is likely to remain volatile ahead of June F&O expiry due on Thursday.
The equity market extended its correction stance following the last week’s pattern formation to remain sluggish throughout the week. Despite picking up the pace in Thursday’s trading session to reach the 9,699 level, Nifty failed to cohere on that level as the selling pressure mounted towards the end of the trade to close at the negative territory.
On the Moving Average Analysis, the EMA indicates an immediate support level at 9580 & 9550, while the resistance level will be tested at 9680 and 9710 levels.
“On the daily chart, Nifty formed an inverted hammer-like pattern, indicating a lack of conviction for a breakout from higher resistance level, signalling a muted movement in next week’s session,” Dinesh Rohira, Founder & CEO of 5nance told Moneycontrol.
As GST regime surfaces around for its implementation coupled with rigid macro data, the short-term consolidation in the space can’t be ruled out in forthcoming sessions, tracking a sideways movement however on the bullish trajectory at 9,650 levels,” he said.
Rohira further added that the barrier in medium-term for upward momentum will be resisted at 9,680 level unless market witnesses a breakout from this leg, which will hype for the next rally.
We have collated a list of stocks from various experts which can give up to 20 percent upside in the short term:
Tata Power Ltd: BUY| Target Rs 98.50| Stop loss Rs75.05 | Upside 20%
Tata Power Ltd. gained 7 percent on weekly basis to close at Rs 81.40 on Friday’s trading session. The stock went through series of correction phases during the early month of the trading session on the backdrop of mounting selling pressure.
However, after consolidating at its lower support level for several durations, the stock entered into its bullish reversal trend giving a strong rebound from 76-77 level indicating an upward trajectory.
The relative strength index (RSI) of stock stood at 58, which indicates a positive signal as the price being traded above its critical resistance level.
Further, the EMA has a strong positive signal for uptrend with next immediate support level seen at current levels, while the upper resistance will be tested at 86 and 91 level.
The breakout from this level will build an upward momentum to trade at its peak at 101 level. We have a BUY recommendation for Tata Power which is currently trading at Rs 81.50, with a target of Rs 98.50 and a Stop Loss of Rs 75.05.
Jain Irrigation Systems Ltd: BUY | Target Price Rs. 120 | Stop loss Rs 98 |Upside 14%
Regardless of trading in the sideways direction this week, Jain Irrigation stood to gain 2 per cent on weekly basis; however, the stock was down by 3 percent from previous closing level. The early selloff during the opening session of Friday’s trade dragged the price to 105 level but rebounded back to its previous closing level towards the end.
The consolation period during the last week of May ended the downward trend to form its lower support level at 95 which gave an upward trend. Since then the stock continued to trade above its previous close with marginal dip occasionally.
The technical outlook for the stock suggests a strong upward trend with RSI at 63, indicating a strong buy regime, while the MACD at 2.19 shows a crossover from its Signal-Line at 1.69 giving a bullish rally in coming session.
According to exponential moving average analysis, it indicates a strong uptrend with a major support level at Rs 104 and Rs 102 with upper resistance level at Rs 119. We have a BUY recommendation for Jain Irrigation which is currently trading at Rs 105.70, with a target of Rs 120 and a Stop Loss placed Rs 98.
Century Textiles & Industries Ltd: BUY| Target Rs1,210 | Stop loss Rs 1095 | Upside 8%
The selloff pressure during the Friday’s trading session dragged the price at 1120 level after registering an intraday high at Rs 1,145 on a weekly basis. However, the stock continued its winning streak to gain 5 percent on weekly basis.
The stock remained on an upward trajectory since its upward rally though it witnessed a minor corrective decline at a certain phase. The RSI at 55 indicates a price trading above its resistance level showing buying signal. Further, the EMA analysis indicates strong technical support for the upward movement.
Based on EMA, the stock will witness a major support level at 1095 and 1086, while the resistance level will be tested at 1140. The possibility of breakout from upper circuit level will support the next leg of upward trend.
We have a BUY recommendation for Century Textile Ltd. which is currently trading at Rs. 1119, with a target of Rs 1210 and Stop Loss placed at Rs. 1095.
V-Guard Ltd: SELL | Target Rs150 | Stop loss Rs184| Upside 13%
V-Guard went through a series of volatile ride moving sideways since the early month of the trading session. After opening at 190 level during Tuesday’s trade, the stock entered in negative trajectory forming a bearish pattern on daily chart indicating a downward trend in near-term and thus closed at the 179.5 level on Friday.
Further, the RSI of the stock stood at 43, specifying the selling sentiment coupled with weak MACD analysis. Further, based on Moving Average the price of stock dipped below its 20-days SMA which indicates a further downward trend in the medium term.
The stock will face a major resistance level at 184, while the support level will be seen at 152. The stock is technically weak with the possibility for a downward breakout to reach its lower support level.
We have a SELL recommendation for V-Guard Ltd. which is currently trading at Rs 179.5, with a target of Rs 150 and a Stop Loss placed at Rs 184.
UltraTech Cement Ltd: SELL | Target Rs 3742 | Stop loss Rs 4110 | Upside 6%
The stock extended its corrective phase throughout the week despite taking an upward moment on Thursday’s trade but failed to sustain. The stock was down by 2 percent during the closing period as compare to earlier closing.
However, on weekly basis, the stock gained a marginal upside of 0.3 per cent. On the technical front, the stock is in negative trajectory indicating a further downward trend.
The RSI of stock post a weak level at 42 with mounting selling pressure, which may extend further unless a stock triggers a positive scenario. Further, the EMA and SMA indicates a weaker position, as the price started trading below its all moving average price. The stock will face a resistance level at 4157, while the support level will be seen at 3926, 3846.
Given the outlook of stock based on technical, it can’t be ruled out that the stock will witness a further consolidation period at the lower support of 3840.
We have a SELL recommendation for Ultra Tech Cement Ltd. which is currently trading at Rs. 4000.2, with a target of Rs3742 and a Stop Loss placed at Rs. 4,110.
Analyst: SMC Capital
ICICI Bank: BUY| Target Rs 330| Stop Loss Rs 275| Return 13%| Time 1-2 months
The stock closed at Rs 291.85 on 23rd June 2017. It made a 52-week low at Rs 200.98 on June 24, 2016, and a 52-week high of 297.61 on May 31, 2017. The 200 days Exponential Moving Average (EMA) of the stock on the daily chart is currently at Rs 256.21.
After a decent up move from 255 to 295 levels, the stock is continuously trading sideways in the range of 285-295 for three weeks with a positive bias. In consolidation, technical indicators have been averaged out and are ready to give the decent upside so buying is anticipated from current levels.
Therefore, one can buy in the range of Rs 287-289 levels for the upside target of Rs 320-330 levels with a stop loss below Rs 275.
Petronet LNG: BUY| Target Rs 480| Stop Loss Rs 418| Return 9%| Time 1-2 months
The stock closed at Rs 438.25 on 23rd June 2017. It made a 52-week low at Rs 274.70 on June 24, 2016, and a 52-week high of Rs 459 on May 22, 2017. The 200-days Exponential Moving Average (EMA) of the stock on the daily chart is currently at Rs 388.33.
The short term, medium term and long term bias are positive for the stock. It is trading in the range of Rs 425-455 levels from past few weeks with a positive bias. Moreover, consolidation is considered as healthy sigh after up move, which indicates that old trend is intact and new move is going to start.
Therefore, one can buy in the range of Rs 432-436 levels for the upside target of 470-480 levels with a stop loss below Rs 418.
Analyst: Pritesh Mehta, Head of Technical Research at IIFL Private Wealth
Balrampur Chini: BUY| Target Rs 169| Stop Loss Rs 146| Return 15%
Failure to break above the multiple tops around three-digit gann number of 169 resulted in a sharp decline in the month of June. So far, the stock in this month has declined by 4 percent. However, recent structure clearly highlights that selling pressure has come to an end.
On the weekly chart, the stock has taken the support of it 35-weekly EMA. The same also coincides with the midpoint of the current gann channel.
Thereafter, it went into a period of base formation. In Thursday’s trade, it attempted a breakout from recent consolidation. However, it failed to confirm a close above Rs 153. Despite Thursday’s setback, base building pattern suggests a strong move on the horizon as the stock has reversed from an important moving average support point.
Based on above-mentioned parameters, we recommend a buy on Balrampur Chini above Rs 153 with a stop loss of Rs 146 for a target of Rs 169.
Godfrey Phillips: BUY| Target Rs 1390| Stop Loss Rs 1240| Return 10%
It is in a strong uptrend since December 2016. It is moving higher with the support of its rising trendline which coincides with the support of 21-weekly EMA, wherein every decline is met with buying interest.
The action of last five weeks could easily be termed as contraction within a triangle pattern. Any kind of consolidation in an up trending stock tends to break on the upside. It confirmed a positive break in Thursday’s trade which suggests that the stock has resumed its prevailing uptrend following a phase of congestion.
Harmonics suggests that it is currently on the last leg of ABCD pattern. The last leg tends to be explosive in nature. So, a swift up move is expected in the near term. Based on above rationales, we advise traders to create longs above Rs 1,285 with a stop loss of Rs 1,240 for a target of Rs 1,390.
Siemens: BUY| Target Rs 1440| Stop Loss Rs 1320| Return 8%
After an extended decline since the second week of May, the stock found support around its 13-weekly EMA. This moving average support has been in place since February 2017, wherein every dip resulted in a buying opportunity.
After marking a low of Rs 1,299, it began a process of the base building which was in place for two weeks. The recent low coincided with the midpoint of the current gann channel. In Thursday’s session, it also provided a breakout from the recent consolidation at the bottom.
Moreover, it also registered a breakout from the resistance of downward sloping trendline, which suggests that the selling pressure has exhausted. We expect the stock to witness follow-through buying and build on the recent uptick. Buy Siemens above Rs 1,356 with a stop loss of Rs 1,320 for a target of Rs 1,440.