Santosh Meena, Head of Research at Swastika Investmart
The Nifty is trading sideways where it is facing resistance at 16,400 level, however, 16,100-16,000 is a strong demand zone. If we look at the open interest data, then there is the highest open interest build-up at the 16,000 strike Put option therefore bulls will try to defend 16,000 mark. But if Nifty slips below 16,000 level then we can expect a selling pressure towards 15,800-15,700 zone.
On the upside, if the Nifty manages to take out 16,400 resistance level then we can expect a short-covering rally towards 16,700 level.
Bank Nifty is outperforming, however, 34,800-35,000 is a critical supply zone; above this, we can expect a short-covering rally towards 36,000 mark. On the downside, 34,000-33,900 is an immediate demand zone and 34,000 strike Put option is holding the highest open interest. Therefore, we can expect a bounceback from here while if it slips below 33,900 level then we can expect selling pressure 33,300-33,000 zone.
Overall structure looks bullish but there is a sharp rise in India VIX which indicates that the market is expecting a large swing in either direction. The direction of the global market will be important ahead of Fed minutes and Jerom Powell's speech.
Here are three buy calls for next 2-3 weeks:
AIA Engineering: Buy | LTP: Rs 1,882 | Stop-Loss: Rs 1,800 | Target: Rs 2,140 | Return: 14 percent
The stock is forming a bullish Inverse Head and Shoulder formation where the neckline is placed around Rs 2,000 level; above this, we can expect a rally towards Rs 2,150-2,200 zone.
It took support at 50-DMA (day moving average) followed by a correction and then witnessed pullback with closing above its all-important moving averages. There is a positive crossover on both RSI (relative strength index) and MACD (moving average convergence divergence).
Jamna Auto Industries: Buy | LTP: Rs 120 | Stop-Loss: Rs 110 | Target: Rs 135 | Return: 12.5 percent
The counter is in strong bullish momentum where it has witnessed a breakout of downsloping trendline resistance and is ready for a fresh leg of rally towards Rs 135 level.
On the downside, Rs 116 is an immediate support level while 20-DMA of Rs 110 is a critical support level. The counter is trading above its all-important moving averages with a positive bias in most of the momentum indicators.
Phoenix Mills: Buy | LTP: Rs 1,128 | Stop-Loss: Rs 1,040 | Target: Rs 1,275 | Return: 13 percent
The counter is outperforming the Nifty Realty index where it is on the verge of a breakout of a critical hurdle of Rs 1,150 that may lead to further strength towards Rs 1,250-1,300 zone.
It is respecting its moving averages with higher highs and higher lows formation. Momentum indicator RSI is trading above 60 mark and MACD is trading above centerline that is showing signs of strength.
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