Market undertone is likely to remain bullish with the support of consistent FII buying and short covering.
By SMC Global
The derivative data indicates bullish scenario to continue. We can see short covering on every dip just after the start of July series. We have been seeing put writers aggressively selling puts and call writers unwinding short positions.
On Tuesday, they were active in selling 9800 and 9700 puts which indicate upside to continue. Put OI concentration has shifted towards 9,600 from 9,500 earlier after the start of July series in recent trading sessions.
In the July option contracts, we are seeing options open interest building up in 9,800 calls and 9600 puts, which indicates the range of 9600-9800 this expiry; however, short covering above 9850 levels cannot be ruled out.
Market undertone is likely to remain bullish with the support of consistent FII buying and short covering. On the technical front, 9700-9740 spot levels is strong support zone and the current trend is likely to continue towards 9850-9900.
Here is a list of top five stocks which can give up to 13% return in short term:
L&T: BUY| Target Rs1880| Stop Loss Rs1,650| Upside 8%
The stock is going through a series of consolidation phase during previous few weeks. However, in past session, buying momentum was seen coming in stock as it has managed to close above its falling trend line.
Additionally, prices are also well maintained above its short and long term moving averages. On daily charts, the stock has also formed a double bottom formation around Rs1,670 levels.
Traders can buy the stock in a range of Rs1745-1735 for the upside target of Rs1880 with a stop loss below Rs1650.
M&M: BUY| Target Rs1540| Stop Loss Rs1300| Upside 11%
The stock has been trading consistently higher and making higher highs and higher lows on daily charts. Moreover, it is trading above its short and long term moving averages with multiple supports on the downside.
On the weekly charts, the stock has formed ascending triangle formation and is on the verge of giving a breakout. The secondary indicators like RSI and stochastic also support upside in prices going forward.
Traders can accumulate the stock in a range of Rs1395-1385 for the upside target of Rs1540 with a stop loss below Rs1300.
Bharat Financial: BUY| Target Rs850| Stop Loss Rs695| Upside 13%
The stock has given a fresh price breakout from its declining trend line on the daily chart. Moreover, it has also formed symmetrical triangle formation and given breakout above its resistance level of Rs750.
Moreover, upside breakout in prices is also well supported with larger volumes which suggest bullish momentum to continue in coming sessions as well.
Traders can accumulate the stock in a range of Rs760-750 for the upside target of Rs850 with a stop loss below Rs695.
Capital First: BUY| Target Rs800| Stop Loss Rs655| Upside 13%
The stock has given a consolidation breakout after trading in the range of Rs650-700 for more than five weeks. Furthermore, the stock has made triple bottom formation and has taken support at its 200 days EMA multiple times.
The surge in prices is also well supported by secondary indicators like RSI and stochastic. Traders can accumulate the stock in a range of Rs710-705 for the upside target of Rs800 with a stop loss below Rs655.
Tata Chemicals: BUY| Target Rs710| Stop Loss Rs595| Upside 11%
The stock has made a double bottom formation on the daily charts around Rs580 levels and has risen sharply from there to give a breakout above Rs620 levels last week.
However, since then the stock has seen trading in the range of Rs635-650. On the technical front, it has made a bullish flag formation and is one verge of giving a breakout.
The rising volume along with mounting price also supports the upside in stock going forward. Traders can accumulate the stock in a range of Rs640-635 for the upside target of Rs710 with a stop loss below Rs595.Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decision.