Stocks For Short Term Profit: Nifty saw a gap-up opening and remained in the green throughout the day on May 13. However, profit-booking was visible around the day’s high peeling off some gains.
The index looks strongly capped under the 50-day exponential moving average on the daily time frame.
On the daily chart, the index has been hovering within a rising channel. In addition, the price has sustained above 38.2 percent retracement of the previous fall from 12,152 to 7,511 which again indicates a bullish movement over the short term.
PM Narendra Modi’s Rs 20 lakh crore stimulus package is impressive as the size of the package is significantly higher than the market expectation.
This leaves a space of Rs 12.56 lakh crore, almost 6 percent of GDP for incremental announcements. We expect the package to include additional spending on improving the nation’s infrastructure thus benefiting cement, steel, and road developers.
Technically, the rally of May 13 has not significantly changed the overall bearish structure for the benchmark index. The index needs to fill the gap created on May 4 and needs to sustain above 9,700 level.
Besides, daily RSI (14) is in bullish crossover and rising. Going forward, the Nifty is expected to move higher with immediate resistance pegged at 9,600-9,700. On the lower end, supports are seen at 9,200-9,000.
Here are Stocks For Short Term Profit (two stock recommendations) for the next 3-4 weeks:
Shree Cement | Buy | LTP: Rs 19,800 | Target price: Rs 22,250 | Stop loss: Rs 18,200 | Upside: 12%
After falling back below Rs 19,000 in early May 2020, the stock consolidated on the daily chart and once again reclaimed above its 50-day exponential moving average.
Shree Cement, on a daily interval, has witnessed a breakout of a short term consolidation pattern and is trading above its trend line support.
Momentum oscillator RSI (14) is reading above 55 levels on the daily chart with positive crossover on the cards.
Currently, the stock is trading above its trend line support and is sustaining above its 100 and 200 days EMA on a weekly interval.
Traders can accumulate the stock in the range of Rs 19,660-19,800 for the target of Rs 22,250 with a stop loss below Rs 18,200 on a daily closing basis.
ACC | Buy | LTP: Rs 1,214 | Target price: Rs 1,340 | Stop loss: Rs 1,130 | Upside: 10%
ACC has witnessed the bullish pennant pattern breakout on the daily timeframe.
Since March 25, the counter is trading in higher high higher low formation on a daily time frame which indicates the ongoing positive trend for the counter.
For the last twelve trading sessions, the stock price had been squeezed between 21 & 50-day exponential moving averages.
On May 13, ACC broke its moving average band and is trading above the said averages on a daily scale.
The relative strength of the stock has been significantly higher as compared to Nifty for the last couple of weeks.
Weekly RSI (14) and MACD have reached above their previous peaks and are showing strength in the trend.
Traders can accumulate the stock in the range of Rs 1,203-1,212 for the target of Rs 1,340 with a stop loss below Rs 1,130 on a daily closing basis.
(The author is a technical analyst at Bonanza Portfolio)