Market at record high: Top 10 short-term trading strategies with 8-18% upside


© Nishant Kumar
Market at record high: Top 10 short-term trading strategies with 8-18% upside

After showing signs of consolidation last week, benchmark indices resumed their upward journey with record highs on February 15 morning. Sensex hit 52,000 and Nifty was around 15,300 in early trade. For the week ended February 12, Sensex and Nifty50 closed with gains of 1.6 percent.

The benchmark indices gave up momentum in the second half of the week, but the big rally was seen in the small & midcaps space. The S&P BSE Midcap index closed with gains of 2.5 percent for the week ended Feb 12 while the S&P BSE Smallcap index closed 2.7 percent higher in the same period.

Strong global cues and consistent buying by the FIIs helped the Indian market to hit fresh record highs on Monday. The S&P BSE Sensex climbed above Mount 52K while the Nifty50 also rose above 15,300 levels.

Experts advise investors to stay long but consolidation could continue in the coming week, but at the same time small & midcaps might continue to outperform. The level of 15,300 – 15,000 will be seen as a crucial range and a breakout on either side is likely to dictate the direction of the market.

“The next couple of sessions would be quite crucial and we should be able to get an idea of where the market is heading in the near-term. The pragmatic strategy would be to wait for some sort of trend deciding action and then one should be looking to place aggressive bets,” Sameet Chavan, Chief Technical & Derivatives Analyst at Angel Broking told Moneycontrol.

“In case of an upside breakout above 15300, we would avoid aggressive participation, because as of now, we do not see Nifty going beyond 15,450 – 15,600 in the same leg of the rally,” he said.

Chavan further added that a break below 15,000 would be an interesting one to participate in. In this scenario, a healthy profit-booking towards 14,600 – 14,400 cannot be ruled out.

We spoke to various experts and here’s a list of the top 10 trading strategies for the next 3-4 weeks:

Analyst: Mehul Kothari, AVP – Technical Research at AnandRathi

NESCO: Buy| LTP: Rs 615| Stop Loss: Rs 565| Target: Rs 715| Upside 16%

Recently, the stock confirmed a breakout on the daily chart from the pattern which resembles a bullish inverted head and shoulder. The theoretical target for the pattern comes around 720.

On the weekly scale, RSI (14) has confirmed a range breakout above 60 mark with the strong placement of ADX (14). The mentioned technical evidence indicates bullish bias and hence traders can buy the stock with the above trade setup with a time frame of 3 – 5 weeks.

Nippon Life India: Buy| LTP: Rs 325| Stop Loss: Rs 295| Target: Rs 385| Upside 18%

The stock is currently hovering near the flat line of the ‘ICHIMOKU’ indicator. Generally, whenever a stock sustains above this line we have seen a sharper move on the upside.

In addition; during Jan 2021 the stock confirmed a breakout above 327 level which is the swing high of July 2020. Then after the stock has been consolidating.

The target of this breakout comes around 400 mark. Also, we are witnessing a Hammer kind of candlestick pattern which was formed in the previous week and dictates strength.

Traders are advised to buy the stock in the range of 335 – 325 with a stop loss of 295 for the upside potential target of 385 in 3 – 5 weeks.

ICICI Prudential Life: Buy| LTP: Rs 487| Stop Loss: Rs 467| Target: Rs 527| Upside 8%

The stock confirmed a major breakout above 487 mark from its previous swing high during the month of Dec 2020 after it made a top of 537 and corrected from there. Now, the stock is again hovering near the breakout point.

The placement of ADX and RSI on the daily scale suggests some fresh upside from here on and the risk-reward ratio too is very lucrative at this point in time. Thus we advise traders to buy the stock with a stop loss of 467 for an upside target of 527 in the next 2 – 3 weeks.

Likhita Chepa, Senior Research Analyst at CapitalVia Global Research Limited.

Dhani Services: Buy above Rs 375.10| LTP: Rs 363| Target: Rs 440| Stop Loss: Rs 325| Upside 17%

This stock has formed an Insider Bar patter and is trading above its important moving averages. Any breakout above the level of 375 would lead to a rally in the stock.

We recommend initiating a long position in this stock above 375.10 with a stop loss of 325 and a target of 440.

Hindustan Aeronautics: Buy above Rs 1066| LTP: Rs 1027| Target: Rs 1260| Stop Loss: Rs 895| Upside 18%

This stock has formed a Doji pattern and is trading above its important moving averages. Any breakout above the level of 1065 would add momentum to the stock.

We recommend initiating a long position in this stock above 1066 with a stop loss of 895 and a target of 1260.

Trent: Buy above Rs 701| LTP: Rs 868| Target: Rs 760| Stop Loss: Rs 660| Upside 8%

This stock has given a trend line breakout in its daily charts and is in a consolidation phase. It is taking the support of its 100-Days EMA. Any breakout above the level of 701 would add momentum to the stock.

We recommend initiating a long position in this stock above 701 with a stop loss of 660 and a target of 760.

Expert:  Shabbir Kayyumi, Head of Technical Research at Narnolia Financial Advisors Ltd.

Canara Bank: Buy around: Rs 155| LTP: Rs 157| Target: Rs 180 | Stop Loss Rs 142 | Upside 14%

On the daily and weekly charts, the stock is showing a retest of the neckline of its earlier reversal formation which is broadly positive.

The incremental volume activity post-breakout formation indicates further bounce back from the neckline.

The stock is trading well above its short-term as well as medium-term averages, which indicates that an uptrend wave is likely to continue in the near-term. One can buy this stock around 155 levels for the target of 180, and a stop loss can be placed below 142.

Cadila Healthcare: Buy around: Rs 465| LTP: Rs 468| Target: Rs 530| Stop Loss: Rs 445 | Upside 13%

The stock is expected to give a Flag breakout on the hourly chart with decent volume. Bullish crossover in Stochastic and MACD are looking supportive for this upside breakout.

Positive crossover of 20 & 50 DMA’s indicates strength. The key support lies at 450-445 zone, and until this break decisively, long positions can be held.

Investors can take entry around 465 level with a stop loss of 445 on a closing basis for the target of 530 and 545 levels.

Hindustan Unilever: Buy around: Rs 2240 | LTP: Rs 2241| Target: Rs 2500| Stop Loss Rs 2150 | Upside 11%

The counter is bottoming out with a bullish reversal formation and above 2285 level. It is likely to rally towards 2500. The stock is trading above its 100 and 200-Days moving averages where a previous breakout point of 2150 will act as strong support.

Momentum indicators are positively poised on both daily and weekly charts. We recommend buying the stock around 2250 with a target of 2500, and a stop loss can be placed below Rs 2,150.

Expert: Sameet Chavan, Chief Technical & Derivatives Analyst at Angel Broking

Muthoot Finance | Buy | LTP: Rs 1,315 | Target price: Rs 1,445 | Stop loss: Rs 1,210 | Upside: 10%

This gold financing giant has been one of the rank outperformers over the past few years.

It’s very rare to see any kind of significant correction in this counter and even if it happens, investors just pounce on it to add it to their portfolios.

After a smart V-shaped recovery from the March fiasco, the stock prices went into a consolidation mode and until last week, the range was very much confined.

With this week’s smart rally, the daily chart now exhibits a ‘range breakout’ and since the move is accompanied by decent volumes, we expect the rally to extend in the coming days.

Traders are advised to buy on decline towards Rs 1,290–1,270 for a target of Rs 1,445 in the coming weeks.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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