US Fed decision eyed! Top 5 trading ideas that could give over 10% return each in 3-4 weeks

Indian market closed with gains of around 2 per cent for the week ended 10 December. The Nifty50 reclaimed 17,500 and ended with gains of 1.8 per cent while the S&P BSE Sensex climbed 58000 to close with gains of 1.9 per cent.

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Market participants across the globe will keep a close eye on the outcome of the US Federal Open Market Committee’s two-day policy meeting that ends on December 15, and US inflation numbers.

Not just US Fed market will also keep a close eye on other central bankers which will hold their policy meeting in the coming week.

“The market will remain busy this week to deal with outcomes of the policy of global central banks where the decision of the US Fed will be the most important that is scheduled on 15th December,” Santosh Meena, Head of Research, Swastika Investmart Ltd, said.

“European Central Bank, Bank of England, Swiss National Bank, and Bank of Japan will also come out with their monetary policies next week,” he said.

Meena further added that the recently announced US inflation numbers are in line with expectations and it was not as bad as feared; therefore the market is not expecting any negative surprise from the US Fed.

Any hawkish commentary from the US Fed could lead to a knee jerk reaction in equity markets across the globe including India.  
Technically, the index is trading below short-term moving averages such as 30 & 50-Days Moving Average placed at 17608, and 17,769 respectively. The recent price action suggests that bulls pushed the market higher from lower levels.

The lineup of key events in the week could keep the volatility high. Investors are advised to remain cautious and lighten their positions.

“Domestic inflation data and the FOMC meeting will be crucial events that will dominate movements in the Indian benchmark indices. As the RBI provided no guidance on the rate hike timeline, all eyes will be on the stand FOMC adopts on tapering and interest rate hike trajectory,” Yesha Shah, Head of Equity Research, Samco Securities, said.

“While it is widely expected that the FED will consider the intensity of the Omicron variant before aggressively preponing tapering plans, any surprises in the announcements can cause choppy movements,” said Shah.

She further added that investors should remain cautious and consider value investing till the markets continue to let off steam from excess valuations.

The market could remain volatile, but stock-specific action is likely to continue. Here is a list of top 5 trading ideas by different experts that could give over 10% return each in the next 3-4 weeks:

Expert: Rajesh Palviya, VP - Technical and Derivative Research at Axis Securities

Indiabulls Real Estate Limited: Buy| LTP: Rs 179.25| Target Rs 195-200| Stop Loss: Rs 165| Upside 11%

On the daily chart, the stock has decisively broken out from its one-month consolidation formation on a closing basis. This breakout is accompanied by huge volumes indicating increased participation in the stock on rallies.

The stock was observed from its 20, 50, and 100 Day-SMA support zone which reconfirm bullish sentiments. The daily and weekly strength indicator RSI and the momentum indicator Stochastic both are in a bullish mode which supports rising strength as well as momentum.

The above analysis indicates that an upside of 195-200 levels is possible. The holding period is 3 to 4 weeks.

Minda Corporation Limited: Buy| LTP: Rs 174.95| Target Rs 185-192| Stop Loss: Rs 163| Upside 10%

On the daily chart, the stock has confirmed a “Triangular” pattern breakout at 170 levels on a closing basis. Rising volumes at the breakout zone imply increased participation.

On the weekly chart, the stock is in a strong uptrend forming a series of higher tops and bottoms on 10 December 2021. The stock is placed above its 20, 50, and 100-Day SMA which reconfirms bullish sentiments ahead.

The daily strength indicator RSI is in bullish mode along with positive crossover which supports rising strength. The above analysis indicates an upside of 185-192 levels.

NMDC Limited: Buy| LTP: Rs 147.90| Target Rs 156-165| Stop Loss Rs 135| Upside 11%

Since May’21, the stock was in a downtrend, however, with the current close, the stock has violated its major down sloping trend line on a closing basis indicating a change of trend.

Rising volumes at the breakout zone imply increased participation. On the daily chart, the stock has strongly rebounded from 130 levels which remains crucial support in the near term

The stock is placed above its 20 and 50 Day SMA which reconfirms positive bias.

The daily and weekly strength indicator RSI is in bullish mode along with positive crossover which supports rising strength. The above analysis indicates an upside of 156-165 levels

APL Apollo Tubes Limited: Buy| LTP: Rs 984.60| Target Rs 1050-1085| Stop Loss: Rs 928| Upside 10%

The stock is in a strong uptrend across all the time frames forming a series of higher tops and bottoms.

With the current close, the stock has decisively broken out its past four weeks multiple resistance zone at 955 levels on a closing basis indicating further strength.

Rising volumes at the breakout zone imply increased participation. The stock is placed above its 20, 50, and 100-Day SMA that reconfirms a bullish sentiment in the near term.

The daily and weekly strength indicator RSI is in a bullish mode along with positive crossover which supports rising strength. The above analysis indicates an upside of 1050-1085 levels.

Expert: SMC Global Securities Ltd

Polycab India Limited: Buy| LTP: Rs 2475| Target Rs 2750| Stop Loss: Rs 2300| Upside 11%

Polycab India made a 52-week low at Rs 853.80 on 21st December 2020 and a 52-week high of Rs. 2648.00 on 11th October, 2021.

The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 1956.89

Short-term, medium-term, and long-term biases are looking positive for the stock as it is trading in higher highs and higher lows on charts. Apart from this, it is forming a “Bull Flag” pattern on weekly charts which is bullish in nature.

Last week, the stock has given the pattern breakout along with high volumes and also has managed to close above the same so buying momentum may continue for coming days.

Therefore, one can buy in the range of 2430-2440 levels for the upside target of 2700-2750 levels with a stop loss below 2300 levels. The time horizon could be 1-2 months.

(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.)