Indian markets closed at record high on November 10 on the back of strong global cues.
So far, Nifty has surged more than 8 percent this month while Bank Nifty has gained nearly 19 percent as uncertainty over the US elections ended along with development in the COVID vaccine.
Banking and financial stocks surged sharply with Bajaj and HDFC twins among top gainers.
On the derivatives front, the rally was supported by short-covering, done by call writers at 12,400 and 12,500 strikes.
Furthermore, put writers added hefty open interest at 12,400 strikes and seen shifting at higher bands.
On the technical front, 12,750 and 29,500 would act as an immediate hurdle for Nifty and Bank Nifty, respectively.
However, secondary oscillators suggest that the market is a bit overheated now and traders should expect volatility in the coming sessions.
On the downside, 12,400 would act as strong support for Nifty with bias likely to remain in favour of bulls.
We advise traders to use any dip to create fresh longs. For Bank Nifty, the 28,000-27,500 zone is a strong support area.
Here are three buy calls for the next 2-3 weeks:
LIC Housing Finance | LTP: Rs 323.50 | Target price: Rs 353 | Stop loss: Rs 293 | Upside: 9%
For the last nearly ten weeks, the stock has been consolidating in a broader range of Rs 280-320 along with consistent buying around support levels.
On the daily charts, the stock is holding well above its short and long-term moving averages.
This week, the stock has managed to give a price volume breakout above its 200-days exponential moving average on the daily charts and also succeeded to close above the key resistance level of Rs 320 after a prolonged consolidation.
Delta Corp | LTP: Rs 119.50 | Target price: Rs 132 | Stop loss: Rs 108 | Upside: 10%
The stock has given a sharp rally from Rs 85 to Rs 115 in August 2020 and after that, it went into consolidation as prices were seen fluctuating in the range of Rs 100 to Rs 120 levels.
This week, the stock has managed to give consolidation breakout above the 200-day exponential moving average on a daily timeframe and also managed to close above it.
The positive divergences on secondary oscillators suggest further up-move in the prices as the breakout is well supported by additionally higher volumes.
SBI Life Insurance Company | LTP: Rs 831 | Target price: Rs 902 | Stop loss: Rs 775 | Upside: 9%
For the last three months, the stock has been consistently moving lower in a downward sloping channel with the formation of the lower high and lower bottom patterns.
However, this week the stock has once again moved back above its short-term moving averages with a breakout above the falling trend line of the sloping channel.
The breakout can be seen with rising volumes and positive divergences on secondary oscillators.
(The author is 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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