Tuesday, 4 June 2019

Stock picks of the day: Any dip towards 12,040 could be used to create long positions


The Nifty50 resumed its upward journey, following a minor hiccup in Friday’s trading session to shut shop at a fresh all-time high, comfortably above the 12,000-mark on June 3.

Further, it has broken out from an Ascending Triangle pattern neckline which also was the recent all-time high i.e. 12,040, suggesting a continued bullish stance for the coming trading sessions.

A sustained trade above 12,050 will take the index higher to levels of 12,155-12,240. Any intraday throwback to this level of 12,040-12,050 can be used to initiate fresh longs for upside targets of 12,155-12,240.

However, if the index fails to hold onto this crucial support of 12,040-12,030, it can halt the immediate bullishness dragging it lower to levels of 11,920-11,830.

Moreover, the RSI’s position on the shorter time frame is also suggesting an extended uptrend.

Here is a list of top three stocks which could give 8-13 percent return in the next three to four weeks:

Voltas: Buy| Target: Rs 665| Stop Loss: Rs 565| Upside 13 percent

On the weekly chart, Voltas is on the verge of a breakout from a trend-line resistance placed at Rs 598.

A sustained trade beyond this neckline backed by healthy volumes can resume the uptrend in the stock taking it higher to levels of Rs 635-665.

Moreover, it toook support at the 78.6 percent Fibonacci retracement level in the recent correction and turned higher, indicating that the bulls are actively buying at the support area to push the stock higher.

The RSI has also turned north after taking support at the 50-level forming a higher low. The stock may be bought in the range of Rs 588-594 for the target of Rs 635-665, and keep a stop loss below Rs 565.

Avenue Supermarts: Buy| Target: Rs 1,450| Stop Loss: Rs 1,300| Upside 8 percent

On the daily chart, Avenue Supermarts is on the verge of a breakout from an Ascending Triangle, suggesting a bull trend may be on cards after a successful breakout.

The neckline of the pattern is placed at Rs 1,355, and a sustained trade beyond this resistance line will take the stock higher to levels of Rs 1,400-1,450.

Further, it turned higher after taking support at the 161.8 percent Fibonacci extension level confirming the completion of the corrective wave.

The RSI has also turned higher after making a positive divergence suggesting higher levels. The stock may be bought in the range of Rs 1,335-1,345 for targets of Rs 1,400-1,450, and keep a stop loss below Rs 1,300.

Aditya Birla Capital: Buy| Target: Rs 115| Stop Loss: Rs 98| Upside 13 percent

On the daily chart, Aditya Birla Capital is approaching trend-line resistance formed joining recent highs placed at Rs 103. A sustained trade beyond this neckline can take the stock higher to levels of Rs 108-115.

Moreover, it has turned upwards after forming a higher low suggesting that the downtrend is coming to an arrest. Further, the RSI is also suggesting higher levels in the coming trading sessions. The stock may be bought in the range of Rs 101-103 for targets of Rs 108-115, keeping a stop loss below Rs 98.

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