Unchanged S&P rating, F&O expiry to keep markets volatile — 4 stocks to bet on

By Dinesh Rohira

The Nifty50 index struggled to breakout above its previous peak placed at 10,490 level on the backdrop of caution ahead of major events upcoming in weeks forward.

However, the index managed to close with positive trajectory and decisively traded above its key short-term moving average. Following the trend, the index gained about 1 percent on the weekly basis and closed few points below 10,400 mark.

The index formed a strong bullish candlestick pattern after consecutively closing on a positive trend with an attempt to breakout from its previous high.

Further, the secondary momentum indicator suggested an uplift in sentiment with the relative strength index (RSI) at 61 up from the previous level coupled with MACD nearing its crossover from Signal Line.

A Fibonacci Retracement suggests that an index trading above all level with major support at 10183 and resistance level at 10490.

The retained rating by S&P and few major events in pipeline coupled with F&O expiry, we expect the market to trade on caution mode in upcoming session with an inclination towards the upper band.

Here is a list of top four stocks which can give up to 10% return in the short term:

Bhansali Engineering Polymers: Buy | Target Rs. 179 | Stop loss Rs 150 | Return 10%

Bhansali Engineering continued with a strong uptrend momentum forming a series of rising peaks on its long-term chart coupled with marginal consolidation at a higher level which turned the scrip healthy. It also witnessed a similar growth in volume along with its upward movement.

The scrip formed a strong bullish candlestick-pattern on its weekly price chart and continued to trade laterally on 60-degree trend line touching an upper band which indicates a positive signal.

The secondary momentum indicator further suggested a strong support for an uptrend regime with incremental in its RSI level from the previous zone along a with MACD still continuing above Signal Line.

The stock is currently facing an immediate resistance at Rs 179 and support level at Rs 145. We have a buy recommendation for Bhansali Engineering which is currently trading at Rs 162.15

Praj Industries: Buy | Target Rs 128 | Stop loss Rs 105 | Return 9%

Praj Industries witnessed a major breakout during the last week’s trade after facing a several consolidation phase at lower level placed at 61 range and closed the session at staggering peak level. It also witnessed a similar volume breakout trend during the session which enabled the scrip to rally at a higher level.

The flat momentum witnessed during the past month with bearish trend ended in current session after forming a bullish candlestick pattern which suggests a continued uptrend. Further, the secondary momentum indicator suggested a similar support for the scrip with price trading above all the level at current regime.

The MACD at 5.46 also suggests strong support for the rally with bullish crossover from its signal-line still intact. Based on Fibonacci Retracement the stock is facing a resistance at Rs 122 level and support level at Rs 98. We have a buy recommendation for Praj Industries which is currently trading at Rs 117.10.

Puravankara Projects: Buy | Target Rs 162 | Stop loss Rs 143 | Return 7%

Puravankara witnessed a major breakout during the current session after a long halted movement in its channel line and closed the session at a new peak. Further, it also witnessed a volume support during the same session in tandem to price trend indicating a positive trajectory in the upcoming session.

On the daily price chart, the stock formed a bullish candlestick pattern indicating a continued momentum at the upper level. The momentum indicator further suggests a strong support for bullish sentiment at current price level.

The support level for scrip is currently placed at Rs 140 and resistance is placed at Rs 178. We have a buy recommendation for Puravankara which is currently trading at Rs 152.65

Hindalco Industries: Sell | Target Rs. 243 | Stop loss Rs 259 | Return 3%

Hindalco Industries continued to face headwinds in its daily price movement after clocking near 52-week high and witnessed a continued free fall to trade at a lower level. The stock remained under pressure and traded at negative trajectory on the backdrop of lower volume support.

On the weekly price chart, it formed a strong bearish hold pattern which is expected to keep the stock under pressure without any major breakout in short-term. Further, the price is currently below its all level coupled with bearish crossover on its momentum indicator, thus indicating a continued negative outlook going forward.

The stock is facing its resistance at 257-level while the support level is seen at Rs 242. We have a sell recommendation for Hindalco Industries which is currently trading at Rs 251.65.

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.