Nifty is continuing its southwards journey on the back of selling in heavyweights HDC twins and IT names where Nifty has slipped below its 200-DMA which is a cause of concern, however, 16900-16800 is also a critical demand zone because 16900 is a 50 % retracement of the previous rally while 16800 is a horizontal support level. The derivative data is also indicating an oversold market which is one hope for the bulls for the short-covering rally. If Nifty manages to hold the 16900-16800 zone then we can expect a bounceback where 17150-17300 will be an immediate supply zone while 17500 is a key hurdle.
Banknifty has also slipped below 200-DMA however 36000 is a psychological support level; below this, we can expect more pain towards the 35000 level. On the upside, 36700-37000 is an immediate supply zone while 37500 is the next hurdle.
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FIIs selling could be the main reason behind the last-hour sell-off. Apart from FIIs selling, rising energy prices, geopolitical concerns, and rising US bond yields are key concerns for the market.
Below are three stocks to buy for a return of up to 21% in the near-term (within a month period)
Jash Engineering Ltd: BUY
CMP: Rs 700, Stoploss: Rs 620, Target Price: Rs 850, Upside 21%
The counter is in strong bullish momentum where it is resuming this momentum followed by a breakout of 9 months consolidation. The breakout comes with a big bullish candlestick and high volume that indicates the beginning of a fresh expansion phase. On the upside, 850 looks immediate target while it may move into 4 digits in the coming months. On the downside, a breakout level of 620 will act as an immediate support level.
Southern Petrochemicals: BUY
CMP: Rs 80.25, Stoploss: Rs73.5, Target Price: Rs 94, Upside: 17%)
The counter is in a classical uptrend with higher high and higher lows formation where it is bouncing back from its 20-DMA after a minor pullback to resume its uptrend. On the weekly time frame, there is a breakout of a bullish cup and handle formation. Most of the momentum indicators are positively poised to support the current strength of the trend.
Jamna Auto: BUY
CMP: Rs 107.3, Stoploss: Rs 101, Target Price: Rs 121, Upside: 13%
The counter is outperforming the Nifty Auto index where it has created a strong base at its 200-DMA and now it is trading above its all-important moving averages. It is likely to witness a breakout of a bullish inverse head and shoulder formation on the daily chart for a move towards a 52-week high. Momentum indicators are also positively poised to support the current strength of the trend.
(Santosh Meena, Head of Research, Swastika Investmart Ltd)
Disclaimer: The views / suggestions / advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision