The current trend is likely to head north and on the technical front any break above 11000 levels will definitely add further buying momentum towards 11100 levels.
The Nifty index started the week on a positive note and managed to close above 10,900 on Tuesday. On the derivative front, call writers were seen covering their short positions, while put writers remained active in 10,700 and 10,800 strikes in the recent rally.
In the current scenario, put writers are shifting towards the higher band which shows strength in the current trend. Till last week, 10,500 put strike was the second highest strike with maximum OI of nearly 40 lakh shares followed by 10,000 strikes.
But, this week, 10,800 strikes emerged as the second highest OI of more than 43 lakh shares. This clearly indicates that bears now seem to be on the back foot.
Moving forward, we believe that on the downside, 10,800-10,700 levels will act as strong support while on upside 11,000 levels will be key levels to watch.
The current trend is likely to head north and on the technical front any break above 11,000 levels will definitely add further buying momentum towards 11,100 levels
Here is a list of top 3 stocks which could give up to 10% return in the next 1 month:
Capital First: Buy| Target: Rs 612| Stop Loss: Rs 520| Return 10%
In the recent weeks, the stock took support around 480 levels and witnessed a V-shaped recovery thereon which helped it to surpass above its 200-day exponential moving average (EMA) on the daily charts.
On the shorter time frame, the stock has formed a rounding bottom pattern while on the broader charts, a breakout above “Cup & Handle “pattern can be seen.
Both the pattern are bullish in nature. Traders can accumulate the stock in a range of 555-565 for the upside target of 612 levels and a stop loss below 520.
United Spirits: Buy| Target: Rs 710| Stop Loss: Rs 600| Return 10%
After giving a breakout above 650 levels in the recent past, the stock witnessed profit booking at higher levels and has once again slipped towards 610 levels to take support at its long-term moving averages on the daily interval.
However, from the last four to five trading sessions, the stock price was consolidating in the range of 610 to 645. At the current juncture, we have witnessed a fresh breakout above 645 levels this week along with positive divergence on the secondary oscillators like RSI & stochastic.
Traders can accumulate the stock in a range of 640-645 for the upside target of 710 levels and a stop loss below 600.
Exide Industries: Buy| Target: Rs 281| Stop Loss: Rs 240| Return 10%
The stock has been consolidating in the range of 240-265 for more than ten weeks and is now hovering well above its 100-days exponential moving average (DMA) on the weekly charts.
At the current juncture, the stock has formed a triple bottom pattern and bullish flag pattern on daily charts and is on verge of a breakout above the consolidation range.
The positive divergence on Rsi is also pointing towards the next up move in prices going forward. Traders can accumulate the stock in a range of 255-259 for the upside target of 281 levels and a stop loss below 240.
The author is a Senior Research Analyst, SMC Global Securities.
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