The Indian market began this week on a positive note with Bank Nifty taking the lead on the back of sharp gains in HDFC twins, ICICI Bank and Axis Bank.
On the derivatives front, put writers were seen shifting towards higher bands which indicates that the bias is likely to remain bullish in the coming sessions as well.
On the higher side, call writers hold maximum open interest at 12,000 strike above which, we can witness further short-covering which could take Nifty towards 12,100 levels as well.
On the technical front, the 11,700-11,600 zone is a strong support area for Nifty and any dip in prices should be used to create fresh longs.
Here are three buy calls for the next 3-4 weeks:
AU Small Finance Bank | LTP: Rs 788.80 | Target price: Rs 915 | Stop loss: Rs 705 | Upside: 16%
For the last more than twelve weeks, the stock has been consolidating in the range of Rs 600-750 levels along with consistent buying around support levels.
On the daily charts, prices are still holding well above the short and long-term moving averages.
This week, the stock has given a breakout above the key resistance level of Rs 750 after a prolonged consolidation of nearly three months.
Additionally, the stock has also formed a W-pattern on the broader charts along with a rectangle pattern on the daily intervals which suggests further upside in the prices.
Dabur India | LTP: Rs 529 | Target price: Rs 574 | Stop loss: Rs 490 | Upside: 8.5%
The stock can be seen trading in a rising channel on the daily charts with prices holding well above the short-term moving averages.
This week, the stock has managed to give a breakout above the bullish flag pattern formation on the daily charts along with marginally higher volumes.
The price volumes action suggests a long build-up in the prices that points towards the next upside in the coming sessions.
Hindalco Industries | LTP: Rs 180.30 | Target price: Rs 193 | Stop loss: Rs 165 | Upside: 7%
After making a high of Rs 203 in late August, the stock witnessed profit-booking and was seen trading lower as prices fell below its 200-days exponential moving average on the daily charts.
However, the stock saw an almost V-shape recovery after testing Rs 155. It once again surpassed its 200-days exponential moving average which is placed at Rs 170.
At the current juncture, the stock has made an inverted head and shoulder pattern on the daily charts and is on the verge of fresh breakout above the neckline of the pattern formation.
Positive divergences on secondary oscillators also suggest the next upswing in the prices.
(The author is a senior technical analyst at SMC Global 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.