Stock picks of the day: Go long on Nifty with a stop below 10,500; 3 stocks to buy

HDFC Securities advises investors to accumulate long positions on Nifty with a stop loss below 10,500 levels for a target of 10,750 and beyond that at 11,000.

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After a consecutive decline for the last three days, the Nifty resumed its upward journey on Monday, where Nifty registered a triple-digit gain to close at 10,629 levels.

Moreover, Nifty bounced back from the strong support level of 10,490, which is placed at 38.2% retracement of the entire upswing from the boom of 10,004 seen on October 26, 2018 to the high of 10,775 recorded on November 19.

The Nifty is also trading above its 20-DMA, placed at 10,507 levels. Moreover, higher tops and higher bottoms are well intact and the Nifty is also trading above the Supertrend indicator on the daily charts.

On the other hand, Bank Nifty has also given a breakout on the daily chart by closing above the resistance level of 26,300 to close at highest level since September 18.

In the derivatives segment, we have seen long positions built in Nifty and Bank Nifty Futures. Foreign institutional investors (FIIs) also created fresh longs in the index futures during the current November series.

Amongst the Options, puts have been written at 10,500-10,600 levels. Considering the technical and derivative evidence discussed above, we believe that the short-term trend in the Nifty and Bank Nifty is still bullish.

Therefore, we advise accumulating long positions in Nifty with a stop loss below 10,500 levels and targets of 10,750 and beyond that at 11,000.

In the Bank Nifty also, one should accumulate long positions with the stop loss below 25,950 and a target of 26,700 and beyond that 27,100-levels.

Here is a list of top three stocks which could give 6-10% return in the next 1 month:

ITC: Buy| LTP: Rs 286| Target Rs. 304 | Stop-Loss: Rs 276 | Return 6%

ITC has given a breakout on the daily chart by closing above the strong resistance level of Rs 285 with higher volumes. The stock price is also on the verge of giving a breakout above the downward slopping trend line on the daily chart.

The momentum indicators and Oscillators like RSI and MACD are also showing strength in the stock from a short to medium-term perspective.

FMCG as a sector doing well and looking good on the charts. Therefore, we recommend buying ITC for an initial target of Rs 304 and a stop loss below Rs 276.

Canara Bank: Buy| LTP: Rs 264| Target: Rs 290 | Stop-Loss: Rs 248| Return 10%

Canara Bank has given a breakout on the daily chart when it managed to close above its 200-day SMA. It is one of the strongest public sector banks which has risen nearly 30 percent from the lows during the last one month.

The stock price is trading in a narrow range since the last few days and is on the verge of giving a breakout on the higher side. In the derivative segment, we have seen huge additions in Open Interest with price rise during the current November series.

Oscillators and momentum Indicators like RSI and MACD are showing strength on the daily charts. The stock price currently trading above its 5, 20 and 200-DMA indicating that the stock is in an uptrend.

Therefore, we recommend investors to buy Canara Bank at current levels for an upside target of Rs 290 and a stop loss placed below Rs 248.

PVR: Buy| LTP: Rs 1437| Target: Rs 1530| Stop-Loss: Rs 1375| Return 6%

PVR is one of the outperformers amongst the mid-cap stocks. The stock managed to rally by about by 5 percent till date in the CY18 compared to 18 percent and 32 percent fall seen in the Mid-cap and Small-cap indices respectively indicating that the stock is in a clear uptrend.

After taking support at its 20-days SMA during the last week, the stock price has given a breakout on the daily chart with higher volumes to close at a two-week high.

The stock price is currently trading above its 5, 20 and 200-DMA indicating that the stock is in an uptrend. Therefore, we recommend buying PVR for the target of Rs 1530, and a stop loss placed below Rs 1375

Disclaimer:-The views and investment tips expressed by investment experts are their own. Ripples Advisory advises users to check with certified experts before taking any investment decisions.

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