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Hot Stocks | Bata India, L&T and HCL Technologies can give 9-15% return in short term

Nifty witnessed a fresh breakout on charts after almost two months of consolidation in the range of 15,500-15,900. It crossed the 16,000-mark for the first time on August 3

August 04, 2021 / 07:33 AM IST
 
 
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Nifty finally managed to breach the key psychological level of 16,000 on August 3 after making many attempts in the recent past.

The breakout was seen with heavy volumes as Call writers were seen at 16,000 strike unwinding their positions while Put writers added hefty open interest at 15,900 and 16,000 strikes.

Healthy buying in most sectors pushed domestic equities to record high levels.

Heavyweights like SBI, ICICI Bank, ACC, HDFC, Axis Bank and Bajaj twins witnessed strong buying momentum which took the Indian market to record highs.

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On the technical front, Nifty has witnessed a fresh breakout on charts after almost two months of consolidation in the range of 15,500-15,900.

In the coming sessions, we expect the momentum to continue towards 16,350-16,400 levels.

We expect that Bank Nifty will also join the rally and move towards 35,800 levels from here on. However, on the higher side, once again 36,000 will act as a strong hurdle for the banking index.

Here are three buy calls for the next 2-3 weeks:

Bata India | LTP: Rs 1,686.70 | Target price: Rs 1,934 | Stop loss: Rs 1,540 | Upside: 15%

This stock has recovered sharply from the lows of Rs 1,300 and gained momentum above Rs 1,500 after taking support at its 100-day exponential moving average on the weekly charts.

At the current juncture, this stock has formed a rounding bottom pattern on daily intervals along with an inverted head and shoulder pattern on weekly charts.

Additionally, the breakout above the key resistance level of Rs 1,675 has also been observed this week with a pattern breakout. Traders can accumulate the stock in the range of Rs 1,680-1,690.

Larsen & Toubro (L&T) | LTP: Rs 1,631 | Target price: Rs 1,805 | Stop loss: Rs 1,520 | Upside: 11%

After testing its 52-week high of Rs 1,647, this stock has been consolidating in the range of Rs 1,580-1,640 levels.

The consolidation in prices after a stunner rally from Rs 1,500 to 1,640 has formed a rectangle pattern on the daily charts.

Additionally, this stock has given a breakout above the neckline of the inverted head and shoulder pattern visible on weekly charts.

Both the patterns suggest a healthy upside in the stock price from hereon. Traders can accumulate the stock in the range of Rs 1,625-1,635.

HCL Technologies | LTP: Rs 1,039 | Target price: Rs 1,135 | Stop loss: Rs 970 | Upside: 9%

This stock has been maintaining its uptrend and trading in a rising channel on broader charts with the formation of the higher high and higher bottom.

However, in the recent past, this stock has formed a triple top pattern around Rs 1,050 and retraced towards its 50-day exponential moving average on the daily interval and took support at the trendline of the rising channel.

Now, once again the stock has formed a rounding bottom pattern and is on the verge of a fresh breakout above its 52-week high of Rs 1,067.

The positive divergences on secondary oscillators suggest an up-move in the prices. Traders can accumulate the stock in the range of Rs 1,030-1,040.

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 decisions.
Shitij Gandhi is a senior technical analyst at SMC Global Securities
first published: Aug 4, 2021 07:33 am

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