Despite opening on a weak note, the Indian market made a smart recovery from lower levels and managed to close in the green for the tenth consecutive session on January 5.
A sharp surge was seen in banking and financial stocks. Axis Bank, along with HDFC twins, remained among top performers while IT names like TCS and Wipro also supported the up move in the market.
On the derivative front, Put writers have been continuously adding up hefty open interest at 14,000 and 14,100 strikes which indicates limited downside in Nifty as of now.
On the flip side, Call writers are feeling uncomfortable at the current juncture as substantial shedding up of open interest at 14,100 and 14,200 strikes were seen.
Technical indicators suggest that the market is likely to witness intraday volatility in the coming sessions with bias likely to remain in favour of bulls as far as Nifty is holding above 13,800 levels broadly.
Here are three buy calls for the next 2-3 weeks:
Muthoot Finance | LTP: Rs 1,292.15 | Target price: Rs 1,428 | Stop loss: Rs 1,185 | Upside: 11%
This week, the stock has given a breakout from prolonged consolidation and a nearly twelve-week rangebound moves. The breakout can be seen with marginally higher volumes.
In the recent past, the stock took support at its 100-day exponential moving average on the daily charts and made almost a V-shape recovery to once again get back above its short-term moving averages on the daily interval.
At the current juncture, the stock has also given a breakout above the neckline of an inverted head and shoulder pattern on the daily charts which point towards the next upswing in the prices.
Traders can accumulate the stock in the range of Rs 1,285-1,295 levels for the upside target of Rs 1,428.
Lupin | LTP: Rs 1,041.30 | Target price: Rs 1,160 | Stop loss: Rs 960 | Upside: 11%
After testing Rs 1,122 levels in September 2020, the stock took a breather and fell towards Rs 860 levels to take support at its 100-day exponential moving average on the weekly interval.
Since then, recovery has been seen in prices as once again the stock is trading well above its short and long-term moving averages on weekly charts.
At the current juncture, the stock has made a rounding bottom pattern on the weekly interval and given a fresh breakout above the key resistance level of Rs 1,020.
On the daily charts as well, the breakout above the symmetrical triangle pattern can be witnessed with marginally higher volumes which indicates strength in the uptrend.
Traders can accumulate the stock in the range of Rs 1,035-1,040 for the upside target of Rs 1,160.
Aurobindo Pharma | LTP: Rs 979.35 | Target price: Rs 1,105 | Stop loss: Rs 890 | Upside: 13%
After forming a double-bottom pattern around Rs 750 levels, the stock made a smart recovery and tested its 52-week high on January 5.
It has given a breakout above the cup and handle pattern visible on the daily charts. Moreover, it has been consistently moving well above its short and long-term moving averages.
The prices can be seen fluctuating in a rising channel with the formation of the higher high and higher bottom patterns.
Alongside, positive divergences on secondary oscillators with rising volumes also suggest that the up-move could continue in the coming sessions as well.
Traders can accumulate the stock in the range of Rs 975-980 for the upside target of Rs 1,105.
(The author is Senior Technical Analyst at SMC Global Securities)
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