After two consecutive days of fall, the Indian market recovered sharply on January 19 as the benchmark Nifty posted a gain of 240 points in a single-day and reclaimed 14,500 levels.
Bank Nifty also reclaimed 32,400 levels with support coming from HDFC & Bajaj twins.
On the derivatives front, Put writers were seen adding hefty open interest at 14,300 & 14,400 Put strikes while Call writers shed open interest at 14,500 strikes.
In the upcoming session, the market can witness a follow-up rally as there is still a lot of outstanding positions held by Call writers.
On the higher side, immediate resistance is placed at 14,600 for Nifty while Bank Nifty has a strong hurdle in the zone of 32,600 to 32,800.
Any decisive move in Nifty beyond 14,600 could trigger further short-covering which could take Nifty towards 14,800.
However, volatility is likely to grip the market on the back of the ongoing quarterly result season while bias would remain in favour of bulls as far Nifty is holding above 14,300 levels.
Here are three buy calls for the next 2-3 weeks:
Torrent Power | LTP: Rs 340.25 | Target price: Rs 376 | Stop loss: Rs 310 | Upside: 11%
After forming a double-bottom pattern around Rs 292, the stock made a smart recovery and surpassed its 200-day exponential moving average on the daily charts which was placed at Rs 315.
The stock has given a breakout above the cup and handle pattern, visible on the daily charts. 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 pattern.
Positive divergences on secondary oscillators with rising volumes also suggest that the up-move could continue in the upcoming sessions as well.
Traders can accumulate the stock in the range of Rs 335-340.
TVS Motor Company | LTP: Rs 511.35 | Target price: Rs 559 | Stop loss: Rs 475 | Upside: 9%
Last week, the stock rose sharply above the key resistance of Rs 506 along with a breakout above the neckline of inverted head and shoulder pattern and tested Rs 533 levels in a short span of time.
However, due to profit-booking, prices retraced back towards Rs 500 and took support at its short-term moving averages on the daily charts.
On Tuesday, a fresh breakout above the falling trendline of the sloping channel on the short-term charts was witnessed.
The breakout can be seen with marginally higher volumes which point towards the continuation of its bullish trend.
Traders can accumulate the stock in the range of Rs 508-515.
ITC | LTP: Rs 218.95 | Target price: Rs 238 | Stop loss: Rs 202 | Upside: 9%
For nearly the last six weeks, this stock has been trading in a broader range of Rs 200-215 with prices holding well above their 200-day exponential moving average on the daily charts.
At the current juncture, the stock has formed a W-pattern on the daily interval and given a breakout above the key resistance of Rs 218 this week.
The breakout can be seen with marginally higher volumes. The price-volume action along with positive divergences on secondary oscillators suggests the next upswing in the prices.
Traders can accumulate the stock in the range of Rs 216-220.
(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.
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