The weekly relative strength index (RSI) inched higher to 64 levels, indicating a positive divergence in the price. The weekly moving average convergence divergence, which is placed at 135, continued to trade above the signal line.
The Indian equity market saw overwhelming momentum after consolidating in a tight range. It registered its best weekly performance after a long halt. The Nifty reclaimed the crucial psychological level of 11,000 last week, rising more than 1,000 points from a low of 9,998 levels recorded in March.
Despite trade war fears between two giant economies, the index reacted to positive macro data as India overtook France as the sixth largest economy. After an upward trend seen throughout last week, it ended the weekend session on a flat note amid profit booking at the higher level. However, it managed to close above the psychological level placed at 11,018 with a weekly gain of about 2.3 percent.
The index formed a small bearish candlestick pattern on the daily chart during Friday’s session. On the weekly price chart, it made a clear bullish candlestick pattern after breaching 11,000 levels with a 5-day high of 11,071.
The weekly relative strength index (RSI) inched higher to 64 levels, indicating a positive divergence in the price. The weekly moving average convergence divergence, which is placed at 135, continued to trade above the signal line.
With the index managing to close above its 50-20 day exponential moving average, the crucial support is now placed at 10,835 levels.
Amid expectations of favourable results in the current quarter, coupled with easing fears of a trade war, the index is likely to trade in a positive trajectory if it surpasses 11,175 level decisively.
However, the truncated momentum in the backdrop of profit booking is likely to keep the index under pressure as visible during the last session.
We advise investors to maintain a selective approach with a trailing stop-loss on every upward movement. We maintain our rangebound trade at 11,145 levels on upside and 10,920 levels on the downside.
Here is a list of top 3 stocks that could return 5-11% in the next 1-2 months:
Adani Enterprises Ltd: Buy | Target: Rs. 146 | Stop-loss: Rs. 124 | Return: 11%
Adani Enterprise traded in a positive trajectory on its weekly price chart post its correction from 52-weeks high. The scrip took strong support near its 52-weeks low.
On the weekly price chart, the scrip registered a solid bullish candlestick pattern indicating a reversal in the trend post upward breakout from long-term averages of 200-100-days backed by strong volume growth.
Further, the weekly RSI placed at 61 signals a buying regime at a current level along with positive cues from MACD which suggests an upward shift.
The scrip is likely to face resistance at Rs 150 and support is seen at Rs 118. We have a BUY recommendation for Adani Enterprise which is currently trading at Rs. 131.65
Prabhat Dairy Ltd: Buy | Target: Rs. 158 | Stop-loss: Rs. 135 | Return: 6%
Prabhat Dairy recently witnessed a reversal in trend favoring upward momentum after consolidating in multiple price range levels including a decline from 52-weeks high over the last six months.
The scrip revisited Rs 128 levels and formed a strong base support. It revered from that level to close above Rs 134 levels which is 200-days EMA levels. The positive breakout seen on weekly basis aided the scrip to form a long bullish candlestick pattern indicating a reversal in trend at the current level.
The weekly RSI placed at 61 signals a buying regime at a current level along with positive cues from MACD which suggests an upward shift.
The scrip has a support at 128 levels and resistance level at 172. We have a buy recommendation for Prabhat Dairy which is currently trading at Rs. 149.40
UPL Ltd: Sell | Target: Rs. 535 | Stop-loss: Rs. 584 | Return: 5%
UPL witnessed a sharp correction seen on the long-term chart. It breached its crucial support level of 200-days EMA on the downside and continued to trade lower amid selling pressure.
The scrip consolidated in a range of Rs 765 and Rs 606 levels, but last week it further slipped from this level which indicates sustain selling regime.
The scrip formed a solid bearish candlestick pattern on its weekly price chart after breaching below important level indicating a sustained pressure.
The secondary momentum trend continued to indicate a negative signal with RSI slipping below at 27 coupled with the bearish outlook from MACD trend. The scrip is likely to face resistance around Rs 703 levels and crucial support at 381 levels. We have a sell recommendation for UPL which is currently trading at Rs. 562.55
Disclaimer: The author is Founder & CEO, 5nance.com. 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.
Two days Free Trials and best services packages for dealing in Stock market click here to get >> Nifty Market Tips and Ripples Advisory One Missed call on @9644405056
No comments:
Post a Comment