Nifty has been able to hold the support of 11,540 as it witnessed a strong up-move across sectors and stocks.
The pullback in global markets from lower levels and positive earnings of companies such as ICICI Bank and SBI triggered the strong up-move in financials and Havells, Sun Pharma in their respective sectors.
The monthly auto sales numbers were promising and the festival season ahead may help to maintain strong traction.
The pharma sector has also seen a pullback from lower levels reinstating confidence after a minor correction.
Nifty has crossed its multiple resistance levels near 12,000 and one can expect a new high with mid-caps and small-caps outperforming the broader markets.
India VIX has also cooled off from the high of 26 levels, indicating lesser volatility going ahead.
Nifty Midcap 100 index has also given a breakout above its 200-day average which should hit the target of 18,500 in the next few weeks.
Here are three buy calls for the next 2-3 weeks:
Cummins India | LTP: Rs 453.60 | Target price: Rs 515 | Stop loss: Rs 427 | Upside: 14%
The stock has made a double bottom near sub-Rs 430 levels and witnessed a sharp up-move with strong volumes.
Weekly RSI has also reversed upwards, indicating a strong breakout from the current levels.
On the higher side, the double bottom target gives an upside of 14 percent near Rs 515.
Exide Industries | LTP: Rs 162.80 | Target price: Rs 186 | Stop loss: Rs 149 | Upside: 14%
The stock closed in an inside range on monthly expiry and we expect a strong reversal breakout on the higher side.
It has closed at a 10-day high with strong volumes and RSI has been trading above the average line for the last couple of weeks.
The prolonged rangebound move and crossover of the long-term averages will witness a sharp up-move.
United Breweries (UBL) | LTP: Rs 952 | Target price: Rs 1,060 | Stop loss: Rs 895 | Upside: 11%
The stock has closed at a 5-day high and its key technical indicators, on the short-term timeframe, have reversed giving a buy signal.
Stochastic and RSI on daily charts are in bullish mode. The sector is witnessing positive momentum and we expect the stock to outperform from the current levels.
(The author is Senior Research Analyst at Reliance Securities)
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