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Thursday, July 27, 2017

Equity Tips

Nifty slips below 10K; top 4 stocks which can give up to 13% return

The stock is showing classic signs of topping out. After forming multiple peaks around Rs450 in May 2017, the stock has underperformed and has been steadily moving lower, breaking below important support levels.

In this week’s trade, it also confirmed a break below the support of its 35-Weekly moving average. This critical moving average was acting as a strong support since May 2016.

The point of polarity support is placed around Rs370. A fall below the same would lead to a sharp acceleration in the downside movement. Moreover, it is facing resistance at its downward sloping trendline, which suggests that short-term rallies have proved to be short-lived.

A fall below Rs361 would result in a shift in the orbit on the downside. We recommend investors to short IOC Aug Futs below Rs370 with a stop loss of Rs380 for a target of Rs345.

Then, the secondary trend line is also ascending as it connected consecutive higher highs. On numerous occasions, upon reaching the lower trend line, the stock has provided strong pull back as seen in last week of June and the first week of July.

In this week’s trade, it made a break above the upper trendline, suggesting an increase in momentum on the upside. On the weekly chart, the stock is on the verge of breaking past the resistance of downward sloping trendline.

A move above Rs825 would confirm a breakout on higher time-frame, the corroborating positive structure on multiple time-frames. Based on above rationale, we recommend a buy between Rs820-825 with a stop loss of Rs795 for a target of Rs890.

Investment & trading in securities market is always subjected to market risks, past performance is not a guarantee of future performance.
CapitalStars Investment Adviser: SEBI Registration Number: INA000001647
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