Stock picks of the day for October 22, 2018
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ITC: Buy| Target: Rs 306 | Stop loss: Rs 275 | Return: 6 percent
ITC witnessed a healthy correction of about 17 percent in the last two-month from its 52-weeks high placed at Rs 322 towards a low of Rs 265.
However, the scrip witnessed a strong upward reversal for an extended period despite a negative market breadth, and witnessed a decisive breakout from its long-term 200-days EMA level placed at Rs 283.
It also saw a substantial volume growth in the last one week at the current level which translates to a reversal in trend. The RSI level stood upward at 50 while MACD had no significant trend. We have a buy recommendation for ITC which is currently trading at Rs. 289.5
NIIT Technologies: Buy| Target: Rs 1,288| Stop loss: Rs 1,220 | Return: 4 percent
NIIT remained on uptrend trajectory during last week after trading on a rangebound level for over one month. It made a correction from price-band of Rs 1,272-1,193 towards a low of Rs 1,043 before initiating the current upward trend.
It managed to break out from its 100-days level placed at Rs 1,170 coupled with strong volume growth which indicates that the buying sentiment is active at the current level.
The momentum indicator outlined a positive trend at the current level with weekly RSI at 55 and gradually moving upward. MACD is likely to witness bullish crossover in the coming sessions to trade above its signal line. We have a buy recommendation for NIIT Technologies which is currently trading at Rs 1,238.3.
Avenue Supermart: Sell| Target: Rs 1,201 | Stop loss: Rs. 1,268 | Downside: 3 percent
Avenue Supermart has continued to be under stiff selling pressure over the last one month and has slipped below its long-term crucial levels of 200-days EMA placed at Rs 1,393.
Despite its attempt to reverse the trend during a couple of sessions, it has failed to sustain the rally to form long bearish candlestick pattern on the daily price chart.
The scrip currently holds a strong support at Rs 1,175 and a breach below this level will trigger another leg of the downward rally.
The RSI stands at 31 while MACD continues to trade below its signal line, indicating a weak trend for the scrip. We have a sell recommendation for Avenue Supermart which is currently trading at Rs 1,234.3.