Hot Stocks | Bank of India, Tata Communications, Union Bank may deliver 11-19% return in short term
Hot Stocks | Bank of India, Tata Communications, Union Bank may deliver 11-19% return in short term
Traders should cut their short positions if Nifty surpasses 19,650 resistance.
On August 14, the Nifty went to hit a low of 19,257 in the first half and rebounded after taking support on its 50-day EMA (exponential moving average) in the second half. The index managed to end in the green with a bullish hammer candlestick pattern on the daily chart. Formation of a hammer candlestick is a first sign of reversal of bullish trends. However, confirmation would only come if the Nifty manages to surpass the crucial resistance derived from the downward sloping trendline, adjoining the daily highs of July 20 (19,991), and August 9 (19,645). This trend line resistance is placed at 19,600-odd levels.
Another important resistance comes in for the Nifty around 19,642 levels, where the 20-day SMA (simple moving average) is placed. On August 2, the 20-day SMA was breached for the first time since the rally started from March 2023. So, the previous support of 20-day SMA could interchange its role as a resistance going forward.
So, we can consider the range of 19,600-19,650 as very strong resistance for the Nifty. Traders should cut their short positions if the benchmark index surpasses 19,650. Above 19,650, we expect it to march towards fresh all-time high above 19,991.
A low of 19,257, made on August 14 becomes the support for the Nifty and unless that is breached, traders are advised not to take aggressive shorts in the Nifty.
Bank of India: Buy | LTP: Rs 89.70 | Stop-Loss: Rs 82 | Target: Rs 100 | Return: 11.5 percent
The stock price has broken out from the symmetrical triangle on the weekly chart with rising volumes. PSU banking as a sector has been outperforming for last couple of months.
The stock is placed above all important moving averages, which indicates bullish trend on all time frames. After few weeks of consolidation, the stock seems to have resumed primary uptrend.
Tata Communications: Buy | LTP: Rs 1,705.65 | Stop-Loss: Rs 1,611 | Targets: Rs 1,803-1,890 | Return: 10.8 percent
Primary trend of the stock has been bullish with higher tops and higher bottoms on the weekly charts. Stock price has been finding support on its 20 DEMA.
The stock has recently shown throwback fall towards its previous top support. ADX (average directional index) Indicator has turned in to bullish trend. The stock is placed above all important moving averages, which indicates bullish trend on all time frames.
Union Bank of India: Buy | LTP: Rs 92 | Stop-Loss: Rs 85 | Targets: Rs 100-110 | Return: 19 percent
Th stock has been finding support on its 20-day SMA, placed at Rs 88. It has remained resilient in last two weeks against the weakness of the benchmark indices.
The stock seems to have broken out from last three weeks’ price consolidation. Indicators and oscillators have turned bullish on the weekly and monthly charts.
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