Stock Picks Podcast on May 25, 2018: 3 stocks that could return up to 10%
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Infosys: Buy around Rs 1,214 - 1,208| Target: Rs 1,300| Stop loss: Rs 1,170| Return 6%
After witnessing a sharp rally from the bottom of Rs 848, the stock hit a fresh all-time high of Rs 1,221 during late January 2018. Subsequently, it slipped into a broad consolidation and formed a triangle pattern on daily chart.
During Wednesday’s trade, the stock confirmed its breakout from the said triangle. On a weekly chart, stock confirmed its breakout from symmetrical triangle pattern; however, the follow-up buying was missing.
Now, we believe that the stock will resume its uptrend hence traders are recommended to buy this stock in the range of Rs 1,214 – 1,208 with a price target of Rs 1,300 and stop loss placed below Rs 1,170.
ITC: Buy around Rs 272 - 268| Target: Rs 300| Stop loss: Rs 260| Return 9.5%
Looking at the daily line chart, the stock has formed a strong base near Rs 250 and then rallied sharply but the up move got capped near Rs 290.
Failure to cross its resistance zone triggered a sharp profit booking and the stock hit a low of Rs 272 which coincided with the 50% retracement of its previous swing move along with the daily 89-EMA.
Also, we are seeing a formation of a Positive reversal pattern. Considering the above evidence, we advise traders to buy this stock in a range of Rs 272 to Rs 268 with a price target of Rs 300. A stop loss to be placed below Rs 260.
Maruti Suzuki: Sell around Rs 8,460 - 8,500| Target: Rs 8,000| Stop loss: Rs 8,810| Return 5%
Looking at the daily chart, the stock has formed a descending triangle pattern and it recently confirmed a breakdown from the said pattern.
The lower band of the triangle also coincided with the daily 200-SMA. The daily RSI (14) broke the support level of 40.
On a weekly chart, the stock confirmed the formation of Lower Top Lower Bottom formation. Hence, we recommend traders to go short in a range of Rs 8,460 – 8,500 with a target price of 8000. A stop loss should be placed above Rs 8,810.