Vikas Jain
Nifty traded in a narrow range of 100 points on August 13 but midcaps and smallcaps continued to outperform.
Individual stocks are reacting with respect to their quarterly numbers and the index heavyweights are flat.
Nifty midcap and smallcap indices have outperformed, gaining 2.6 percent and 3.2 percent, respectively, for the week so far, while Nifty has gained 0.8 percent.
The first-quarter results of FY21 will be over in the current week and now markets will focus more on global cues and other news flows.
Bank Nifty to Nifty ratio has declined to 2.0 levels. PSU Bank index has given a breakout above its short and medium-term averages while private banks continue to hold critical support levels.
Nifty has good support near a 200-day average, followed by the highest put OI at 11,000 strikes while on the higher side 11,500-11,550 will act as resistance.
Here are three buy calls for the next 3-4 weeks:
Bharti Airtel | Buy | LTP: Rs 536.50 | Target price: Rs 620 | Stop loss: Rs 495 | Upside: 16%
The stock has completed its 13-week corrective phase from its record high of Rs 612 it tested in May 2020.
The recent correction after the results is a good entry point to accumulate as the risk-reward is in favour and it has good support on the downside near its 200-day average.
On the longer timeframe, the 21-month average will act as strong support and protect the downside from current levels.
Canara Bank | Buy | LTP: Rs 102.25 | Target price: Rs 125 | Stop loss: Rs 93 | Upside: 22%
The prolonged rangebound move and crossover of the medium-term averages will witness a sharp up-move.
It has formed a triple bottom in the range of Rs 96-98 on the weekly charts and the inside range, on the daily charts, should give a breakout.
Daily RSI is trading above 50 levels, indicating a bullish setup for the stock.
The stock has witnessed a good correction post its rights issue, registering 38 percent retracement of the previous move from Rs 75-150 levels.
Crossover of its short and medium-term averages on the daily charts, with strong volumes, reinforces our positive stance.
The sector is in positive momentum and RSI crossing upwards from its average line gives a confirmation of a strong move.
(The author is Senior Research Analyst at Reliance Securities)
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.
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