Research Desk – StockBroking

ValueMax May 01, 2019

ValueMax
Monthly Investment Ideas

ValueMax helps clients to take a long stance on stocks from the S&PBSE-100 universe. Comprising

monthly technical investment ideas, ValueMax will have 10 stock recommendations, which will be issued
at the beginning of every month. The selection and recommendation criteria will be based on technical

analysis.

ValueMax will be made available to the dealers and relationship managers through Karvy Mail. A brief

technical report on the ideas will also be released, justifying our view on the stocks and the reason for the
selection. The report is also available on Karvy online websites. Book profit/exit messages will be

communicated during the LIVE market on NEST (trading terminal) under the head ValueMax.

Please find the ValueMax investment ideas for May 2019.

Stock Sector CMP Action Average SL TGT 1 TGT 2

ADANIPORTS INFRA 392.8 BUY 372 358 428 442

ASIANPAINT CD 1463.15 BUY 1390 1340 1625 1675

AXISBANK BANKING 766.85 BUY 735 720 818 835

BAJAJ-AUTO AUTO 2984.1 BUY 2820 2730 3240 3360

DIVISLAB PHARMA 1746.85 BUY 1670 1630 1893 1923

HDFC BFSI 1995 BUY 1920 1880 2110 2130

HINDUNILVR FMCG 1757.7 BUY 1690 1650 1870 1920

INFY IT 751.35 BUY 720 680 825 840

JSWSTEEL METALS 308.35 BUY 295 285 338 354

RELIANCE ENERGY 1392.8 BUY 1340 1280 1535 1560

CMP: Current Market Price; SL: Stop Loss; TGT: Target

Note: All charts are sourced from Spider Software.

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 ValueMax

Stock Sector CMP Action Average SL TGT 1 TGT 2

ADANIPORTS INFRA 392.80 BUY 372 358 428 442

Key levels

Moving averages Support Resistance

21 day EMA 384 384 415

50 day EMA 373 372 428

200 day EMA 366 358 444

 ADANIPORTS has gained more than 3.87% during the last month where as the broader index i.e. Nifty 50 ended with
gain of around 1.07% during the said time frame. The overall chart structure of the stock suggests formation of higher
highs and higher lows on the daily chart, indicating that the stock is expected to extend gains in the short term.

 On the weekly charts, the stock has given falling trend line break out around 389 levels and has been sustaining well
over it since then. The accumulation has been seen at 374 levels where previous major supports are also placed,
indicating probable accumulation in the stock. Since then, the stock has been heading higher with minor pullbacks.

 Among the indicators, the 14-day RSI has already given a positive crossover with the 9-day signal line on the daily and
weekly charts, reaffirming the bullish biasness in the counter which is likely to continue in the near term. The
Parabolic-SAR is placed below the price on the daily chart, re-iterating our positive stance in the counter.

 The stock is trading above its 21/50/100/200-DEMA on the daily and weekly charts, indicating inherent strength in the
counter in the said time frames. The MACD is trading above the signal line in buy territory on weekly chart, indicating
positive momentum in the stock in near term.

Our take: The recent price action suggests that the positive momentum in the stock is likely to continue in the coming
trading sessions. Thus, we recommend buying the stock for the targets of 428-442 levels and add further on any dip
towards 372 levels with a stop loss placed below 358 levels.

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 ValueMax

Stock Sector CMP Action Average SL TGT 1 TGT 2

ASIANPAINT CD 1463.15 BUY 1390 1340 1625 1675

Key levels

Moving averages Support Resistance

21 day EMA 1454 1425 1530

50 day EMA 1442 1390 1625

200 day EMA 1365 1340 1675

 ASIANPAINT is trading with a secular uptrend and is currently trading with a strong bullish bias as seen in daily charts
with decent volumes.

 During the current uptrend, the stock has also witnessed a decent breakout at 1434 levels with decent volumes
indicating the buying interest in the stock.

 Among the leading indicators, CCI (60) and Heiken candlesticks indicate a positive trend in the daily chart as well as
the weekly charts.

 RSI (14) and Stoc(5,3,3) indicators in daily chart is showing bullish bias indicating the stock is being accumulated by
stronger hands on every dip.

 On the momentum setup, weekly MFI (30) is pointing northwards after giving a positive crossover with the signal line
and, in the daily time frame, the oscillator bounced off taking support of 50 levels reaffirming underlying strength in the
counter.

 Weekly MACD (12, 26, 9) as well is trading above the zero line in weekly charts indicating the inbuilt strength in the
counter.

 .
Our take: Considering all the above data, we recommend traders to enter the stock at the current levels for the higher
targets of 1625 followed by 1675 levels and any correction towards 1390 levels can be utilized to average the stock
keeping a stop loss below 1340 levels on closing basis.

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Stock Sector CMP Action Average SL TGT 1 TGT 2

AXISBANK BANKING 766.85 BUY 735 720 818 835

Key levels

Moving averages Support Resistance

21 day EMA 757 750 780

50 day EMA 739 730 820

200 day EMA 660 720 840

 The stock is in the cycle of higher highs and higher lows from the lows on the daily charts and is currently placed
above its major moving averages. The counter has been one of the outperformer among the private banking space in
the last month and is expected to continue the outperformance in the coming days as well.

 The counter managed to form base around the support levels of 720-740 and is all set to move higher towards its
recent peaks. The volumes have been encouraging in the recent consolidation indicating strong hands have started
accumulating the stock at even current levels.

 In the short term time frame, analyzing the price volume action, the stock seems to be extremely poised to move
higher towards the psychological mark of 820-840 levels. On the other side, the Bollinger band (20, 2) on the weekly
charts is also pointing northwards with price rolling on its mean indicating the direction of the counter is on the long
side with supports on the lower side shifting higher with the lower band.

 The stock is also trading above the cluster of major short and long term moving averages with technical indicator 14
day RSI showing reading in the comfortable zone, clearly indicating the bullish trend is likely to remain intact in the
counter. On the derivative front, the stock seems to have good support around 730 levels where highest put writing is
witnessed of more than 16 lakh shares in the May series which is an unusual activity at the start of the series.

 On the other hand, the overall chart structure of the counter seems to be bullish from a medium term perspective till
the stock price is trading above 700-720 levels on the lower side, while dips towards the recent support levels of 735
may be utilized to average the stock.


Our take: Taking the above the data facts in to the consideration, we recommend short term traders to enter the stock at
the current levels for the potential targets of 818-835 levels. Any dip towards the 735 levels may be utilized to average the
 On the momentum setup, weekly MFI (30) is pointing northwards after giving a positive crossover with the signal line
stock, with a strict stop loss placed below 720 levels.
and, in the daily time frame, the oscillator bounced off taking support of 50 levels reaffirming underlying strength in the
counter.
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 Weekly MACD(12,26,9) as well is trading above the zero line in weekly charts indicating the inbuilt strength in the
counter.
 ValueMax

Stock Sector CMP Action Average SL TGT 1 TGT 2

BAJAJ-AUTO AUTO 2984.10 BUY 2820 2730 3240 3360

Key levels

Moving averages Support Resistance

21 day EMA 2996 2820 3120

50 day EMA 2932 2780 3200

200 day EMA 2834 2730 3360

 BAJAJ-AUTO is one of the consistent performers from its sector. The stock is in cycle of making higher highs and
higher lows in all time frames suggesting inherent strength in the counter. Also the stock is heading strongly from past
three months towards its all time high suggesting aggressive buying in the counter.

 On weekly chart, according to the formation which the counter has made it is indicating bulls to take control near the
support zone of 2820-2840 levels which is the Fibonacci retracement of 38.20% drawn from its all time highs of
3468.35 to its recent swing low of 2420 levels. On technical front, the 14 period RSI has seen a stellar rally from the
lows of 38-40 levels and is currently placed near 56-58 indicating further strength in the counter. Also on weekly chart
the Parabolic SAR (Stop & Reverse) is placed below the current price supporting bullishness intact in the counter.

 On the daily chart, the stock is placed above all its major moving averages (21, 50, 100 & 200 DEMA) and has
witnessed huge rally with positive momentum which is expected to carry the stock price higher. On indicator front, the
14 day RSI is placed near 50-60 levels indicating inherent strength in the counter. On the other hand, the stock
witnessed volatility burst on the Bollinger Band (20,2) on the daily charts coupled by notable trading volumes and is
now placed near its mean band affirming the bullishness intact in the counter and this to continue in the coming future.

 On the derivative front, the stock has witnessed an aggressive rollover indicating the market perception for the counter
is bullish and the momentum is likely to continue in coming trading sessions from short to medium term perspective,
which might help the counter to surge higher.

Our Take: Considering the above data facts, we recommend short to medium term investors to enter the stock at the
current levels for an upside target of 3240 levels breaching which the stock is expected to surge higher towards 3360
levels in coming trading weeks, while any correction towards 2820 levels can be utilized to average stock keeping a stop
loss placed below the support zone of 2730 levels.

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 ValueMax

Stock Sector CMP Action Average SL TGT 1 TGT 2

DIVISLAB PHARMA 1746.85 BUY 1670 1630 1893 1923

Key levels

Moving averages Support Resistance

21 day EMA 1711.32 1682 1754

50 day EMA 1672.61 1670 1893

200 day EMA 1473.26 1630 1923

 DIVISLAB is in secular uptrend from 532 levels in June 2017 forming higher highs and higher lows on weekly chart.
On daily chart the stock is shifting its base upwards indicating accumulations even at these levels.

 The stock is trading well above 21/50/100/200 DEMA levels in indicating strength in the counter in most of the major
time frames supporting our bullish bias.

 Among the leading indicators, parabolic SAR and Heiken candlesticks indicate positive trend in daily chart. Stock has
tested the upper band in Bollinger band in the weekly chart and the bands are expanding, supporting our bullish
conviction about the stock.

 The stock is moving upwards in a channel and now it is moving from the lower range of the channel to the upper range
of the channel indicating continuation of the uptrend for coming few days,

 14 period RSI is trading above its 9 period averages in daily as well as weekly chart indicating positive momentum in
the counter.

Our take: The recent price action suggests the momentum in the stock to continue in the coming month as well. Thus, we
recommend buying the stock for targets of 1893 and 1923 levels with a stop loss placed below 1630 levels.

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 ValueMax

Stock Sector CMP Action Average SL TGT 1 TGT 2

HDFC BFSI 1995 BUY 1920 1880 2110 2130

Key levels

Moving averages Support Resistance

21 day EMA 1986 1930 2040

50 day EMA 1967 1910 2090

200 day EMA 1910 1880 2135

 HDFC has performed in line with its key large cap benchmark of Nifty 50, while it has outperformed its sectoral index
NIFTY Financial Services for the month of April 2019. The stock has closed with a gain of around 1.36%, while during
the same period NIFTY 50 has also gained more than 1.00% to shut shop at 11748. Nifty Financial Services has
ended on a flat note at 12555.

 HDFC has clocked life time highs in the month of April and then the stock has witnessed profit booking, thereby it has
declined more than 5% from all time highs. However, the structure of higher highs and higher lows is still intact,
indicating up trend still persists.

 The stock has given break out from a 4 months trading range and has currently retested it on low volumes. the stock
is also placed above its major short and medium term moving averages, at the same time, every minor dip is being
bought with good volumes, indicating strong hands are accumulating it

 On daily charts though MACD is trading above its neutral line, and there is a bullish crossover, indicating probable
bottom is in place for near term and poised for up move towards life time highs once again. Even the RSI on daily
charts is also placed at 56 indicating more upside is possible from here on.

 On the derivative activity front also, the stock is has decent rollovers to the May series and the same is seen over last
few months, supporting our bullish view for the May month also.

Our take: Considering the above data facts, we recommend short to medium term investors to enter the stock at the
current levels for targets of all time highs, while any correction towards February month major swing lows can be utilized to
average the stock keeping stop loss below recent major moving average.

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 ValueMax

Stock Sector CMP Action Average SL TGT 1 TGT 2

HINDUNILVR FMCG 1757.70 BUY 1690 1650 1870 1920

Key levels

Moving averages Support Resistance

21 day EMA 1723 1720 1790

50 day EMA 1725 1690 1850

200 day EMA 1674 1650 1870

 HINDUNILVR is placed above all its major moving averages on all time frames (daily, weekly as well as monthly charts)
which indicates positive setup.

 The stock has gained around 3% during the month of April, 2019, outperforming the benchmark index NIFTY FMCG
which closed flat during the said time frame.

 The stock has witnessed profit taking from near its all time high around 1850-1870 levels, and found support near its
crucial 200 DEMA around 1650-1670 levels.

 The stock has given a bullish crossover to its short and medium term moving averages on the daily chart in the month
of April and is currently consolidating above the said moving averages, which suggests strong hands are holding the
stock. Any dips towards the said moving averages are being bought into, suggesting accumulation taking place in the
counter.

 The stock has closed at the highest level in the last 10 weeks, which suggests strong buying interest by the market
participants. The stock is placed above its parabolic SAR on the daily as well as weekly chart, which suggests positive
bias in the near term. On the momentum oscillator front, the 14 period RSI is placed above the 9 period signal line on
the daily as well as weekly chart which re-affirms our positive view.

Our take: Considering all the above data facts, we recommend investors to enter the stock at the current levels and any
correction towards the 1790 levels can be utilized to average the stock, for potential upside targets around 1870-1920
levels, with a stop loss placed below 1650 levels

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 ValueMax

Stock Sector CMP Action Average SL TGT 1 TGT 2

INFY IT 751.35 BUY 720 680 825 840

Key levels

Moving averages Support Resistance

21 day EMA 737 735 800

50 day EMA 751 720 825

200 day EMA 693 680 840

 INFY is our preferable bet amongst the Nifty IT. The stock is in uptrend and making higher highs and higher lows on
daily charts. The historical price action in the stock reflect that any meaning full dip in the stock attract market
participants.

 The stock has given price breakout around 740 levels with supportive volume formation on daily charts and closed well
above the same. The stock has seen sharp fall from the all time high of 773 levels which has dragged the stock near
its support zone of around 713- 707 levels. Thereafter, the stock has bounced well from said lower levels and seen
supportive volume formation on daily charts.

 On the daily chart, the stock is placed above all its major moving averages (21, 50, 100 & 200 DEMA) but has
witnessed huge rally with positive momentum which is expected to carry the stock price higher. On technical front, the
14 period RSI has seen a stellar rally from the lows of 38-40 levels and is currently placed near 50 levels, and seen
positive crossover with signal line. Also on weekly chart the Parabolic SAR (Stop & Reverse) is placed below the
current price on monthly chart supporting our bullish view in the stock.

 Considering the above data facts, we recommend short to medium term investors to enter the stock at the current
levels for an upside targets of 825 levels breaching which the stock is expected to surge higher towards 840 levels.
While any correction towards 720 levels can be utilized to average stock keeping a stop loss placed below the support
zone of 680 levels.

 Among the indicators, the 14-day RSI has already given a positive crossover with the 9-day signal line on the daily
and weekly charts, reaffirming the bullish biasness in the counter which is likely to continue in the near term. The
 Our take: The is
Parabolic-SAR recent
placedprice breakout
below in the
the price stock
on the around
daily 740 levels
and weekly chartwith supportive
as well, volume
re-iterating ourformation on daily
positive stance charts
in the
reflects that strong hands are accumulating the stock at higher levels. The recent development in the stock suggests
counter.
that the stock is well placed to take it up move for upside target of 825- 840 levels in near term.

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 ValueMax

Stock Sector CMP Action Average SL TGT 1 TGT 2

JSWSTEEL METALS 308.35 BUY 295 285 338 354

Key levels

Moving averages Support Resistance

21 day EMA 291.62 300 325

50 day EMA 289.50 290 338

200 day EMA 302.57 285 360

 JSWSTEEL has witnessed a strong rally from 147.85 levels to 427.55 and retraced from there to 256.6 levels which is
the 61.8% Fibonacci retracement level for the said rally and bounced back from there indicating end of correction.

 The stock is trading well above 21/50/100/200 DEMA levels in indicating strength in the counter in most of the major
time frames supporting our bullish bias.

 Among the leading indicators, parabolic SAR and Heiken candlesticks indicate positive trend in daily chart. Stock has
tested the upper band in Bollinger band in the weekly chart and the bands are expanding, supporting our bullish
conviction about the stock.

 The stock has given fresh breakout from bullish head and shoulder pattern in daily chart indicating a fresh leg of rally
from these levels. The volumes were above average on the break out which also supports our bullish take on the
counter.

 14 periods RSI is trading above its 9 period averages in daily as well as weekly chart indicating positive momentum in
the counter.

Our take The recent price action suggests the momentum in the stock to continue in the coming month as well. Thus, we
recommend buying the stock for targets of 338 and 354 levels with a stop loss placed below 285 levels.

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 ValueMax

Stock Sector CMP Action Average SL TGT 1 TGT 2

RELIANCE ENERGY 1392.80 BUY 1340 1280 1535 1560

Key levels

Moving averages Support Resistance

21 day EMA 1359 1340 1450

50 day EMA 1320 1310 1500

200 day EMA 1188 1275 1560

 RELIANCE INDUSTRIES is one of the Fortune 500-largest private sector entity, forayed into many business verticals
over the years from backward integration in energy chain, petchem, refining, textiles and now focusing on telecom
business through Reliance Jio.

 The stock price after posting a high of 1406 in the last month, witnessed minor profit booking in last few sessions, and
subsequently witnessed recovery. Recently, stock is consolidating near the highs, forming flag like a formation,
breakout from which may trigger further rally in the counter, and take prices in an uncharted territory in sessions to
come.

 Technically, from an all time high stock price corrected towards its major 21-DEMA which is currently placed near 1359
levels, where it found support and gradually inching higher. As of now stock price is holding well above its short to
medium term moving averages.

 On the momentum setup, 14-period weekly RSI is inching higher towards overbought territory, and also prices are
holding above middle Bollinger Band (20,2) and approaching upper band, indicating bulls are in control, and counter
may strengthen further in weeks to come.

Our take: After a brief consolidation above its average, stock price is gradually inching higher, and momentum is poised
with bullish bias which provides an excellent buying opportunity. Hence one may accumulate stock for the upside target
1535-1560 over the next month, while any dip towards 1340 levels should be utilized to average the stock price, keeping
stop loss below 1280 levels.
KARVY RESEARCH DESK – STOCK BROKING

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 ValueMax

Aditya Kistampally, Amit Samar, Amrita Preetam, Arun Kumar Mantri, M V Narasinga Rao, Osho Krishan, Srinivas Krishnan
Bobba, Syed Hasan Jafar and Viplav Dhandhukia
Research Analysts
QUERIES & FEEDBACK
Technical & Derivatives Research Head
Dr. Ravi Singh
Mob. 9810313561
Toll-Free: 1800 419 8283 Email ID: [email protected]

Karvy Stock Broking Limited

Karvy Millenium | Plot No : 31| Financial District |Gachibowli | Hyderabad - 500 032
Analyst Certification
The following analyst(s), Aditya Kistampally, Amit Samar, Amrita Preetam, Arun Kumar Mantri, M V Narasinga Rao, Osho Krishan, Srinivas Krishnan Bobba, Syed Hasan
Jafar and Viplav Dhandhukia, who is (are) primarily responsible for this report and whose name(s) is/ are mentioned therein, certify (ies) that the views expressed herein
accurately reflect his (their) personal view(s) about the subject security (ies) and issuer(s) and that no part of his (their) compensation was, is or will be directly or indirectly
related to the specific recommendation(s) or views contained in this research report.
Disclaimer

Karvy Stock Broking Limited [KSBL]is registered as a research analyst with SEBI (Registration No INH200003265 ).KSBL is also a SEBI registered Stock Broker,
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Hasan Jafar and Viplav Dhandhukia, Research Analyst did not serve as an officer, director or employee of the companies mentioned in the report.
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