DCB Bank, UPL and SRF among Sanctum#39;s picks that could give double-digit return
After nine consecutive days of decline, markets rallied in the later part of the session to close with gains on May 14. Nifty ended the day at 11,222 up by 0.66 percent.
The broader market indices such as the BSE Midcap and Smallcap were up 0.6 and 0.3 percent, respectively.
Nifty has taken support at its 100-day moving average placed at 11,132 and formed a bullish candle for the day. It needs to cross the immediate hurdle of 11,300 for a bounce back towards 11,400-11,450.
On the downside, the index has support placed at 11,000 where rising trend line connects lows of 10,005 and 10,586 on the daily charts.
Here are five stocks that could give 10-15 percent returns in the next 1 month:
DCB Bank: Buy| LTP: Rs 218| Stop loss: Rs 209| Target: Rs 250| Upside: 15 percent
After hitting a high of Rs 213 in June’17, the stock entered into a corrective phase and touched a low of Rs 140 in October last year. Since then, the stock witnessed a strong rally forming higher tops and higher bottoms on the weekly chart.
In early March this year, the stock witnessed a breakout from the consolidation zone to hit an all-time high of Rs 220 with strong momentum and high volumes indicating buying participation in the stock.
The stock is now consolidating near the higher end of the range, but below average volumes for the last couple of weeks that formed a bullish pole and flag pattern on the charts.
The stock is now showing signs of a breakout after May 14 long body bullish candle and above average volumes. Thus, the stock can be bought at current levels and on dips towards Rs 214 with a stop loss below Rs 209 and a target of Rs 250.
UPL: Buy| LTP: Rs 953| Stop loss: Rs 920| Target: Rs 1,050| Upside: 10 percent
The stock is in an uptrend and has been forming higher tops and higher lows since October low of Rs 582 seen last year. It crossed its previous all-time high of Rs 902 last month.
After crossing its all-time high of Rs 975, the stock has seen a sideways to negative correction in a narrow range and is now consolidating at higher levels.
The recent dips in the price have taken support at its 21-day exponential moving average and bounced back indicating buying coming at higher levels.
Stochastic has given a positive crossover with its average levels on the daily chart. Thus, the stock can be bought at current levels and on dips towards Rs 940 with a stop loss below Rs 920 and a target of Rs 1,050.
SRF: Buy| LTP: Rs 2,600| Stop loss: Rs 2,470| Target: Rs 2,900| Upside: 11 percent
The stock touched Rs 2,446 in May last year and then corrected towards Rs 1,530 in July. Since then, the stock has been forming higher tops and higher bottoms on a weekly chart with good volumes that indicates accumulation.
It crossed its previous high of Rs 2,246 in early April and touched a high of Rs 2,618. Prices then corrected down towards the breakout level and bounced back to hit an all-time high of Rs 2,625 on May 14.
It was on the back of huge volumes with a long bullish candle that indicates buying interest in the stock. Relative strength index (RSI) has also given a positive crossover with its average on the daily chart.
Thus, the stock can be bought at current levels and on dips towards Rs 2,550 with a stop loss below Rs 2,470 and a target of Rs 2,900.
LIC Housing Finance: Buy| LTP: Rs 488| Stop loss: Rs 464| Target: Rs 550| Upside: 12 percent
The stock witnessed a major decline from the highs of Rs 794 in June’17 to a low of Rs 388 in October last year. The prices took support at Rs 388 which was the previous consolidation low indicating crucial support for the stock.
Since then, the stock has rallied towards Rs 553 and corrected to Rs 464. It has now taken support near its long-term 200-days moving average.
The Relative strength index (RSI) has given a positive crossover with average on the daily chart. Thus, the stock can be bought at current levels and on dips towards Rs 480 with a stop loss below Rs 464 and a target of Rs 550 levels.
Apollo Tyres: Sell| LTP: Rs 180| Stop loss: Rs 187| Target: Rs 160| Downside: 11 percent
After a major decline, the stock was seen consolidating in a narrow range of Rs 245 and Rs 192 odd levels for the last six months. It has given a breakdown from the consolidation range with high volumes and a long bearish candle indicating selling pressure.
The stock saw a bounce back to test its breakdown level of Rs 192, but it has now resumed its downtrend and touched a new low post the decline.
The price is moving along lower Bollinger band indicating weakness in the stock. MACD line has given a negative crossover with its average on the weekly chart.
Thus, the stock can be sold at current levels and on a rise towards Rs 182 with a stop loss above Rs 187 and a target of Rs 160 levels.
The author is Head of Technical and Derivatives, Sanctum Wealth Management.
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