What to buy with Nifty near 18K? 6 technical ‘buy’ ideas that could give 6-15% return

The Nifty50 inched closer towards 18000 levels on Monday as the index hit a high of 17,943.50. The index should be able to surpass this crucial resistance level in the expiry week, suggest experts.

While the Nifty50 is trading near new highs, the BankNifty breached 38,000-mark on Monday after ending on a flat closing on Friday, when it continued to struggle around its previous all-time high. To maintain the bullish momentum, BankNifty will need to catch up, experts have suggested.
 
Traders are advised to create fresh long positions on dips, and the immediate support is placed at 17,600 levels.

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“The immediate support on the downside for Nifty is now placed at 17600. Traders are advised not to create aggressive longs at current levels, rather maintain a bullish bias and initiate longs on dips or around immediate supports,” Samco Research said in a note.

The Nifty50 closed with gains of over 1.5 percent for the week ended September 24, and experts see the momentum continuing in this week as well. September quarter earnings, as well as starting of the festive season could keep the sentiment going.

“The October series will continue to see positive momentum, but we expect to remain on a slight flattish trajectory. The October series might see a rally in the IT sector along with the auto sector on the back of the positive result expectations for the Q2 FY22,” Mohit Nigam, Head - PMS, Hem Securities, said.

“Q3 has always remained a festive season. It will boost earnings as the economy is completely open during the festive quarter and present continued positive earnings momentum,” he said.

Analysts advise investors to remain stock-specific and chase stocks that are showing signs of momentum to rebalance their portfolio for the short to medium term.

"Market valuations are high but on the flip side the underlying economic growth is favourable. We would suggest not to be underinvested in equity," Nimish Shah, Chief Investment Officer – Listed Investments, Waterfield Advisors, said.

"One can rebalance portfolios and revert to long-term strategic allocation to large caps by exiting laggards and trimming the tail in mid and small caps, many of which may be overvalued right now," he said.

We have collated a list of top 6 trading ideas by experts for the next 3-4 weeks:

Expert: Sacchitanand Uttekar, DVP – Technical (Equity), Tradebulls Securities

Bajaj Auto: LTP: Rs 3,808| Buy upto 3,750| Stop Loss: Rs 3,680| Target: Rs 4200| Upside 10%

The base of the Triangle formation on its weekly scale is placed around 3700. The recent ‘Engulfing Bullish’ formation reconfirmed the support base around the same while the pattern upper end is placed at 4200 with its apex around 4050.

On its daily scale, post a decent corrective action within the pattern bounds, it has now started to display signs of a fresh bullish sequence of higher tops followed by higher bottoms, cutting above its 200-DEMA zone of 3740.

Hence, it is ideal to accumulate the stock in one's folio as the pattern provides a good risk-to-reward opportunity for the medium as well as long-term commitments.

Coal India: LTP: Rs 166| Buy upto 163| Stop Loss: Rs 158| Target: Rs 188| Upside 15%

A breakout from a Rounding formation on its weekly scale is well supported with volumes. The weekly ADX has just jumped above 25 during the week and closed above 27 while its weekly RSI is far away from being overbought despite the ongoing upmove from its base around 135.

We expect the ongoing momentum to continue towards its 200-WEMA zone which is placed around 190 while its ‘Rounding Bottom’ pattern target also coincides with the same.

HDFC Bank: LTP: Rs 1601| Stop Loss: Rs 1560| Target: Rs 1710| Upside 7%

The recent breakout from a ‘V’ formation on its daily scale indicates a likely price action above its life-high zone around 1645.

The rebound from 1535 towards 1600 has been very swift & significant as the wave formation adheres to the Impulse wave characteristics.

On its weekly scale, the trend strength indicators have been strong for the last 8 weeks now. The RSI is placed at 64 while ADX recently saw a breakout above 25.

The stock has managed to hold its close above its 5-Weeks EMA support level which is now placed at 1573.

With banknifty gearing up for yet another leg of outperformance, we believe Pvt. Banks could again lead from the front.

Expert: Aditya Agarwala, Senior Technical Analyst, YES SECURITIES

MCX: Buy | LTP: Rs 1654| Target: Rs 1750 | Stop Loss: Rs 1600 | Upside 6%

The stock has broken out from a narrow consolidation phase triggering the resumption of the bull trend.

Further, prices are moving higher up on good volumes. Technical indicator, Relative Strength Index (RSI) has turned upwards after taking support at the 50 levels suggesting strength in the stock.

Tata Chemicals: Buy | LTP: Rs 885.20 | Target: Rs 950 | Stop Loss: Rs 845 | Upside 7%

The stock has broken out from a flag pattern hitting new highs confirming bullishness. Further, Technical indicator RSI is also favouring an extended uptrend.

Eicher Motors: Buy| LTP: Rs 2928| Target: Rs 3100| Stop Loss: Rs 2810| Upside 6%

The stock has resumed uptrend after a retest of the neckline of an Ascending Triangle pattern in the recent throwback. Technical indicator RSI has turned upwards after taking support at the 60-level suggesting strength in the stock.

Disclaimer: The views/suggestions/advices 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.