Podcast | Stock picks of the day: Nifty may head towards 11,900-12,000; buy on dips

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After a stellar rally of more than 9 percent in just two trading sessions, the domestic markets took a breather during the past few sessions. Nifty spot has been oscillating in the range of 11,700-11,400. On the upside, the index is facing headwinds near the 11,700 mark since we have a cluster of resistances there.

The first one is the downward sloping trend line formed by joining the peaks of 12,103 and 11,982. Next is the lower trend line of the Andrew’s Pitchfork tool formed by joining the points like 9,951, 11,760 and 10,004 whereas 11,694 is the 78.6 percent retracement level of fall from 11,982 to 10,637.

Going ahead, for the markets to extend the recent euphoria, the Nifty will have to clear the 11,700-mark. In such a scenario, we might witness levels like 11,900-12,000. On the contrary, in case there is a dip from here, 11,400 is likely to act as a strong support for the index. A move below the same might aggravate the selling pressure, which could force the index to meet its 200-day simple moving average placed at 11,244.

Here are the top three stocks which can give good returns: Voltas : Buy | CMP: Rs.678 | Target: Rs 755 | Stop Loss: Rs.620 | Upside 11.4 percent

Voltas underwent a fresh breakout on the larger degree charts above the Rs 660 mark. The price action helped the stock reach its new lifetime high and that, too, on a closing basis, which indicates strength. It is a multiyear breakout with a theoretical target around the Rs 800 mark. Even the weekly RSI indicator has broken out from the falling trend line above the 65-mark.

Traders are advised to buy the stock between Rs 675 and Rs 655 for the upside target of Rs 755 with a stop loss of Rs 620.

Container Corp: Buy | CMP: Rs 619 | Target: Rs 715 | Stop Loss: Rs.560 | Upside: 15.5 percent

The stock confirmed a multiyear breakout during the recent trading session. The price action was supported by extraordinary volumes, which add more conviction to the pattern. The overall price target for the breakout is around Rs 750. On the monthly RSI, we are observing a pattern that resembles a bullish inverse head-and-shoulders pattern, which indicates a fresh upside.

Traders are advised to buy the stock between Rs 620 and Rs 600 for the upside target of Rs 715 with a stop loss of Rs 560.

HDFC: Buy | CMP: Rs 2063 | Target: Rs 2220 | Stop Loss: Rs 1960 | Upside: 7.6 percent

Since November 2018, HDFC has been sustaining well above its 200-day simple moving average. Every time the stock approached the average, we observed considerable buying interest that has pulled the stock higher.

At this juncture, the stock is hovering around its 200-day simple moving average, which is placed at Rs 2,031. Even this time, we expect a similar kind of price action. In addition, there is a bullish ‘double bottom’ formation at Rs 1,960 on the daily chart.

Traders are advised to buy the stock on dips between Rs 2,060 and Rs 2,030 for the upside target of Rs 2,220 with a stop loss of Rs 1,960.

The author is Senior Technical Analyst at IndiaNivesh Securities Limited. (Disclaimer: 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.)

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