Stock Picks of the Day: 3 buy ideas that could return 12-14%

“See strong support for the Nifty at 10,750, 10,700 and 10,650 levels,” says Shitij Gandhi of SMC Global Securities

The markets have seen a smart recovery after the Monetary Policy Committee meeting last week, which was majorly led by short covering and build-up of longs at lower levels.

The Nifty once again reclaimed 10,800 levels on Tuesday which placed call writers in the somewhat uncomfortable situation. In the recent rally, call writers were seen aggressively covering their short positions while put writers were observed creating fresh positions in 10,600, 10,700 and 10,800 strikes.

Strong support is seen 10,750, 10,700 and 10,650 levels. Going forward, the Nifty will see short covering on every dip as derivative data supports the current strength.

Open interest is continuously moving up, indicating a positive move. The current trend is likely to continue towards 10,900-10,925 levels.

Here is a list of top three stocks that could return 12-14% in the short term:

VIP Industries Limited: Buy| Target: Rs 495| Stop loss: Rs 410| Return 12%

From the last eight weeks, the stock has been consolidating in a range of Rs 370-430 before witnessing a fresh breakout this week above a Bullish Flag formation on the daily charts.

The breakout above the pattern formation can be seen along with hefty volumes which clearly indicates the strength in the current trend.

Traders can accumulate the stock in a range of Rs 440-445 for the target of Rs 495 with a stop loss below Rs 410.

Quess Corp Limited: Buy| Target: Rs 1,415| Stop loss: Rs 1,150| Return 13%

The stock has been maintaining its uptrend and is trading in a rising channel since the beginning of the year. However, from the past five weeks, prices were seen fluctuating in a downward channel as the stock was making lower highs and lower lows pattern on the daily charts.

This week the channel breakout has been observed above the falling trend line along with positive divergence on RSI which is a bullish signal for the stock. So, traders can accumulate the stock in a range of Rs 1,250-1,270 for the upside target of Rs 1,415 with a stop loss below Rs 1,150.

NIIT Limited: Buy| Target: Rs 120| Stop loss: Rs 97| Return 14%

After testing Rs 124 levels in the past, the stock witnessed profit booking at higher levels and slid below its 200-days exponential moving average on the daily charts.

However, a sharp recovery has been seen in prices as the stock formed a double bottom formation at Rs 91 levels and now once again regained the momentum above its short and long-term moving averages.

Additionally, “W” shape pattern is quite visible on the charts which indicate that stock may once again retest its recent highs above Rs 120 levels to complete the formation.

Therefore, one can accumulate the stock in the range of Rs 105-107 levels for the upside target of Rs 120 levels with a stop loss below Rs 97.

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Disclaimer:-The views and investment tips expressed by investment experts are their own. Ripples Advisory advises users to check with certified experts before taking any investment decisions.