For the last four weeks, Nifty is witnessing narrowing of trading range forming a short-term symmetrical triangle pattern and it has also completed 5-wave structure.
Thus, we expect a breakout soon. On the downside, if the index starts to trade below 10,692 then we expect the decline towards 10,628. Going below 10,628 would confirm a breakdown and the index can see decline towards 10,425.
On the upside, the index has resistance zone in 10,840-10,870 bracket. But, crossing above 11,000 sustainably will confirm the uptrend.
In Nifty options, maximum open interest for Puts is seen at strike price 10,500 followed by 10,000; whereas for Calls it is seen at strike price 11,000 followed by 10,900.
A further rise in VIX above 17 will be negative for the market. It needs to sustain below 16 for the market to move higher.
Here is a list of five stocks which could give 5-15 percent return:
Divi’s Laboratories Limited: Buy| LTP: Rs 1,520| Stop loss: Rs 1,455| Target: Rs 1,700| Upside: 12 percent
The stock is in an uptrend and has been forming higher tops and higher bottoms on the weekly chart for the last 18 months. It hit an all-time high of Rs 1,578 in November last year and since then the stock has been consolidating in a range of Rs 1,578 and Rs 1,420.
It has formed a Triangle pattern on the daily chart and has been witnessing a breakout from the same. Earlier in the week, the stock witnessed above average volumes that indicated buying participation in the stock.
The Relative Strength Index (RSI) and Stochastic have given a positive crossover with their respective averages on the weekly chart that suggests consolidation is over.
Thus, the stock can be bought at current levels and on dips to Rs 1,420 with a stop loss below Rs 85 and a target of Rs 1,700.
Info Edge (India) Limited: Buy| LTP: Rs 1,674| Stop loss: Rs 1,570| Target: Rs 1,800| Return: 7 percent
The stock touched an all-time high of Rs 1,698 in the month of September and then corrected towards Rs 1,310. Since then, the stock has been consolidating between Rs 1,700 and Rs 1,300 for the last four months and formed a base for the next leg of the up move.
The lows were formed at 200-day moving average indicating value area for the stock. Though the stock is witnessing resistance on the upside, it has rallied sharply from the lower end of the range and declines have been on below-average volumes that indicates buying participation in the counter.
MACD line has given positive crossover with its average above equilibrium level of zero on weekly chart suggesting resumption of the uptrend. Thus, the stock can be bought at current levels and on dips towards Rs 1,620 with a stop loss below Rs 1,570 and a target of Rs 1,800.
Dabur (India) Limited: Buy| LTP: Rs 423| Stop loss: Rs 410| Target: Rs 490| Return: 15 percent
The stock has witnessed a correction from Rs 490 level in August 2018 to November 2018 low of Rs 362, which is a strong support area for the stick. It has seen a strong rally and touched a high of Rs 459.
In December, it retraced 50 percent of the rally from Rs 362 to Rs 459. After consolidating in a narrow range, the price had shown a reversal on the upside with a long bullish candlestick and above average volumes.
The Relative strength index and MACD have given positive crossover with their respective average on the daily chart. Thus, the stock can be bought at current levels and on dips to Rs 425 with a stop loss below Rs 410 and a target of Rs 490.
Torrent Pharmaceuticals Limited: Buy| LTP: Rs 1,945| Stop loss: Rs 1,780| Target: Rs 2,050| Upside: 5 percent
The stock has seen a major consolidation between Rs 1,700 and Rs 1,200 over the period for more than two years. In September, the stock witnessed a breakout to touch a high of Rs 1,873 and then retraced back below the breakout level.
The price found support at 100-day moving average and moved to hit a new all-time high of Rs 1,894. Also, the stock is seeing a breakout from the medium-term consolidation pattern between Rs 1,873 to Rs 1,511.
Thus, it can be bought at current levels and on dips to Rs 1,860 with a stop loss below Rs 1,780 for the target of Rs 2,050.
Axis Bank Limited: Buy| LTP: Rs 663| Stop loss: Rs 620| Target: Rs 750| Return: 13 percent
The stock has formed a Symmetrical Triangle pattern on the weekly chart and is trading in a range of Rs 650 and Rs 350 for almost three years now. On the daily chart, the stock has seen a sharp bounce back from its 200-day moving average.
The price has seen a breakout from Symmetrical Triangle pattern on the daily chart with strong momentum and good volumes that indicates buying participation in the stock.
On the monthly chart, ADX, line indicator of trend strength, is moving up from a neutral level of 20 that suggests that the strength is emerging for a long-term trend. Thus, the stock can be bought at current levels and on dips to Rs 645 with a stop loss below Rs 620 and a target of Rs 750.
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