Podcast | Stock picks of the day: ‘If Nifty holds 10,750, it could touch 11,100 in coming sessions’

Shitij Gandhi

After a long weekend, Indian indices began the week with sharp gains as Nifty50 closed above 10,950-mark on Tuesday. Some hefty buying was seen in auto, PSU banks and metal counter which further supports the up move on broader indices.

On the derivative front, put writers were seen active in 10,800 & 10,900 strikes while call writers were also seen shifting to the higher band. This clearly indicates that bears are now losing control over the markets.

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The maximum open interest (OI) of nearly 28 lakh shares is held with 10700 put strike which should act as major support for the Nifty moving forward.

However, on the technical front, Nifty has taken a V-shaped recovery from lower levels and is now trading well above its long-term moving averages along with some value buying in mid-cap stocks.

We believe that as far Nifty is holding above 10,750 spot levels, the current trend is likely to move towards 11,100 levels in coming sessions.

Here is a list of top three stocks which could give 9-12% return in the next 1 month:

Muthoot Finance Limited: Buy| Target: Rs 635| Stop Loss: Rs 525| Upside 12%

The stock has been maintaining its uptrend and is holding well above its short and long-term moving averages.

This week we have observed fresh breakout in prices after a prolong consolidation of nearly two weeks along with some hefty volumes which suggest for more upside in prices moving forward.

Traders can accumulate the stock in a range of 565-570 for the upside target of 635 levels with a stop loss below 525.

Godrej Industries Limited: Buy| Target: Rs 540| Stop Loss: Rs 470| Upside 9%

The stock has been trading in a downward sloping channel since January 2019 with the formation of a lower high and lower bottom pattern on the daily interval.

However, last week the stock managed to take support around 470-480 zone and has risen back sharply above the falling trend line of the sloping channel.

Additionally, the stock has also given a breakout above the falling wedge pattern along with positive divergences on secondary oscillators.

Traders can accumulate the stock in a range of 495-500 for the upside target of 540 levels with a stop loss below 470.

AIA Engineering Limited: Buy| Target: Rs1985| Stop Loss: Rs 1650| Upside 12%

The stock has been consolidating in a broader range of 1530-1775 for more than three months along with consistent buying emerging at lower levels.

However, this week, we have observed a fresh breakout into prices after a prolong consolidation along with positive divergence on secondary oscillators.

Additionally, we have also observed a bullish flag breakout on weekly charts. So, traders can accumulate the stock in range of 1770-1790 for the upside target of 1985 levels with a stop loss below 1650.

(The author is a Senior Research Analyst, SMC Global Securities Ltd.)

Disclaimer: The views and investment tips expressed by investment experts 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.
First Published on Mar 6, 2019 08:22 am

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