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Hot Stocks | Bet on Havells, Tata Communications, Cummins India for double-digit return in short term. Here's why

Shitij Gandhi of SMC Global expects momentum to continue towards north in upcoming sessions as well, as still lot of short position is held with Call writers which could trigger further short covering as far Nifty holds above 17,000 mark.

December 08, 2021 / 07:09 AM IST
 
 
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Shitij Gandhi, Senior Technical Analyst, SMC Global Securities

Indian markets snapped two-day losing streak and recovered sharply in Tuesday's session on the back of firm global markets. Both the Sensex and the Nifty closed with handsome gains as buying momentum was seen in banking, metal and auto stocks ahead of the RBI meeting on interest rates.

On the derivatives front, short covering was seen by Call writers at 17,000 and 17,100 strikes. On the flip side, Put writers added hefty open interest at 17,000 strike.

On technical front, the Nifty has once again managed to close above its 100-day exponential moving average (17,152) on the daily charts after a sharp recovery from lower levels.

We expect the momentum to continue towards north in upcoming sessions as well as a lot of short position is still held with Call writers which could trigger further short covering as far the Nifty holds above the 17,000 mark.

Close

On the higher side, now 17,350-17,450 zone would act as a next strong hurdle for the Nifty from here on.

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

Havells India: Buy | LTP: Rs 1,410.85 | Stop Loss: Rs 1,290 | Target: Rs 1,600 | Return: 13.4 percent

For nearly one month, the stock can be seen consolidating in a range of Rs 1,290-1,400 with prices holding well above their short and long term moving averages on the daily and weekly charts.

At the current juncture, the stock has formed an Inverted head-and-shoulder pattern on the short term charts, while breakout above the ascending triangle pattern can be observed on broader charts.

Traders can accumulate the stock in a range of Rs 1,400-1,410 for the upside target of Rs 1,600 with stop loss below Rs 1,290.

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Cummins India: Buy | LTP: Rs 943.75 | Stop Loss: Rs 860 | Target: Rs 1,082 | Return: 14.6 percent

Consolidation can be seen in prices in a range of Rs 840-940 from the last two months with prices maintained well above its 200-day exponential moving average on the daily charts.

At the current juncture, the stock has given a fresh breakout above the key resistance level of Rs 940 after a prolonged consolidation phase. The stock has also formed a double-bottom pattern around Rs 850 levels which will act as a strong support for prices in upcoming sessions.

Traders can accumulate the stock in range of Rs 940-944 levels for the upside target of Rs 1,082 levels with stop loss below Rs 860.

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Tata Communications: Buy | LTP: Rs 1,341.35 | Stop Loss: Rs 1,245 | Target: Rs 1,520 | Return: 13.3 percent

The stock tested its 52-week high of Rs 1,540 in October and since then it is seen trading lower on the back of profit-booking. The downside got halted at its 200-day exponential moving average on the daily charts.

Now, from the last one month, the stock can be seen trading in a broader range of Rs 1,200-1,340. At the current juncture, the stock has given a breakout above the neckline of the inverted head and shoulder pattern visible on daily charts.

The sudden surge in volumes with rise in price suggests continuation of rally into upcoming sessions. Traders can accumulate the stock in range of Rs 1,340-1,342 levels for the upside target of Rs 1,520 levels with stop loss below Rs 1,245.

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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
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