Benchmark Nifty has made a new lifetime high above 17,400, however, some profit-booking deprived the index to give a close above this level.
The formation of a doji candle on September 6, which signifies indecision in the market, followed by another doji on September 7 suggests consolidation in the near term is a likely scenario and Nifty can trade within a broader range of 17,450 to 17,200 in the coming few days.
The trend, however, still remains positive therefore a buy on dips strategy is still the best strategy at this juncture.
IT, FMCG, capital goods, real estate and consumption are the sectors that remain positive and are expected to push the index higher.
Nifty Bank underperformed Nifty on September 7, after showing some strength in the last week. However, it is still in the positive territory above 36,200 which is expected to offer strong support.
Nifty Bank may witness buying in the near term after it has seen a small correction.
We recommend a buy around 36,200 for the target of 36,800-37,000, maintaining stop loss below 37,000.
Here are three buy calls for the next 2-3 weeks:
HDFC | LTP: Rs 2,833.20 | Target price: Rs 2,950 | Stop loss: Rs 2,750 | Upside: 4%
The stock is on the verge of a breakout from a rounding bottom formation on the daily charts.
It also gave a breakout from a pennant formation on September 7.
On the derivatives front, fresh long additions has been seen in the past few trading sessions at the same time call unwinding activity took place at 2,800 strike which was holding the highest open interest (OI).
The counter has shown sideways consolidation over the past few sessions after giving a V-shape recovery.
The price pattern is suggesting that post this short breather, the stock is once again ready to move higher.
Short term moving averages (20 and 50 EMA) are placed below the price and are acting as good support for the stock.
Also, there has been a buy crossover in the leading indicators pointing towards an upside move in the coming days.
Maruti Suzuki India | LTP: Rs 6,878 | Target price: Rs 7,150 | Stop loss: Rs 6,760 | Upside: 4%
After a prolonged correction, this stock is finally looking poised for giving a sharp upside move in the short term.
After a good rally, the stock has been consolidating within a small triangular pattern for the past few days, while short-covering activity was clearly visible on the derivatives side during the same period.
Besides, we expect auto stocks to do a catch-up rally and Maruti looks poised to lead from the front.
(The author is VP- Research at Globe capital)
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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