Stock Picks Podcast for April 26, 2018: top 3 stocks that could return up to 21%
Emami Ltd.: BUY| CMP Rs 1,122| Target Rs 1,360| Stop Loss Rs 1,012| Return 21 percent| Time Frame 6 months
The share price of Emami has seen a strong three-fold rally in 2014-15, rallying from June 2014 lows Rs 445 to the lifetime high of 1365 in August 2015. Since then the stock has been trading in a secondary phase of consolidation for nearly past three years.
Meanwhile, the stock rebounded from upward slanting trend line (currently placed around 1000) on multiple occasions. The stock during last two week’s trade has seen the decent up move, resulting in higher high-low on the monthly chart after a three-month hiatus.
We believe the stock is set to resume its primary uptrend and therefore, provides a good buying opportunity for medium term investors.
Time-wise, the multi-fold rally in 2014-15 occurred in 15 months whereas the stock has already spent over 31 months in the current corrective phase while sustaining above 50 percent retracement level of the 2014-15 rally placed around the Rs 915 regions.
The limited price wise correction and extended timewise consolidation is the sign of a healthy corrective phase within an established uptrend.
Another important observation remains that the stock has maintained higher lows during the three-year consolidation phase, a sign of a robust price structure
We believe, the stock is attractively poised after a healthy price wise and time wise correction, and should move higher towards Rs 1,360 being the identical swing highs of 2015 and 2017-18
Royal Orchid Hotels: BUY| CMP Rs 220| Target Rs 259| Stop Loss Rs 205| Return 17 percent| Time Frame 1 month
The share price of Royal Orchid Hotels has recently registered a bullish flag breakout with the strong volume of almost 10 times the 50 weeks average volume of 6 lakh share per week thus offering a fresh entry opportunity to ride the next up move in the stock.
The stock has recently rebounded from the major support area of Rs 170 being the confluence of:
The rising 50 days EMA currently placed at Rs 155 levels
The 50 percent retracement of previous major up move from Rs 100-229
Among oscillators, MACD indicator continued its northbound journey and is seen diverging from its signal line indicating strong momentum.
We expect the stock to maintain positive bias and head towards Rs 259 levels being the 138.2 percent retracement of the previous decline (Rs 229 -157)
Majesco: BUY| CMP Rs 561| Target Rs 632| Stop Loss Rs 522| Return 13 percent| Time Frame 1 months
The share price of Majesco is in a strong uptrend and has recently rebounded taking support at the 200 DMA and is seen forming a higher peak and higher trough in the daily chart indicating positive bias in the stock.
Over the last six weeks, the price action has been captured in a well defined upward sloping channel formation, and has recently registered a breakout above the same indicating strength in the current up move and continuance of bull trend.
While intermediate support remains at Rs 522 levels being the recent breakout area and the high of March 2018, which is likely to reverse its role and act as support in the short term.
Among oscillators, MACD indicator continued its northbound journey after witnessing bullish crossover above zero line, indicating an acceleration of upward momentum.
We believe the stock is likely to head higher in the near-term towards Rs 632 as it is the confluence of the 123.6 percent external retracement of the last leg of decline Rs 604-441and the measuring implication of the rising channel breakout placed around Rs 635 levels.
Disclaimer: The author is Head Technical, AVP at ICICI Direct.com Research. The views and investment tips expressed by investment experts on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.