Nifty on Monday formed a small bearish candle on the daily chart, even as it continued with its higher-high higher low formations. On the hourly chart, said Gaurav Ratnaparkhi of Sharekhan, a rising trendline drawn from the previous key swing high acted as a resistance near the 18,400 level.
“The range of 18,300-18200 is now acting as a support, as per the principle of role reversal. It is crucial to see whether Nifty manages to sustain above this area in order to keep the upside trajectory intact. On the other hand, a breach of this zone will drag the index again to 18,000,” he said.
For the day, the index closed at 18,329.15, down 20.55 points or 0.11 per cent.
Here are three stock picks that can deliver healthy returns to traders in the short term:
Godrej Consumer Products | Buy near Rs 840-835 | Target Rs 900 |Stop loss 805
After losing nearly 17 per cent off the September peak, the stock has regained momentum on upside. A positive follow-up action to a tall bullish candle could mean that the stock is due for mean reversion and short-term rally till Rs 900 is plausible.
One can buy the stock near Rs 840-835 for a target of Rs 900 and a stop loss of Rs 805.
Amit Trivedi, CMT, Technical Analyst for Institutional Equities at YES Securities
JK Tyre | Buy above Rs 170 | Target Rs 183 | Stop loss at Rs 164
JK Tyre stock has been consolidating in a price pattern of a symmetrical triangle, a breakout of which could trigger a meaningful up move on the counter. At current levels, present attractive buying opportunity with favourable risk-reward ratio. The stock price has been consistently taking support near the 50-day moving average, which indicates the underlying trend to be bullish. Relative Strength Index (RSI), being a lead indicator, broke out from the downward sloping trend line that can have potentially bullish implications.
Foram Chheda, CMT, Technical Research Analyst and founder at chartanalytics.co.in.
Dalmia Bharat | Buy near Rs 1,680-1,660 | Target Rs 1,840 | Stop loss Rs 1,600
During start of the month, the stock moved up swiftly on a comparatively higher volume. Sustained move above short term averages is likely to keep near term structure positive. Hence, the recent decline should be considered as buying opportunity. One can buy the stock near Rs 1,680-1,660, with a stop loss of Rs 1,600 for a target of Target Rs 1,840.
Amit Trivedi, CMT, Technical Analyst for Institutional Equities at YES Securities
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