The overall structure of the market remains weak, however, there are some signs of a short-term reversal. The Put-Call ratio had reached 0.69, an extremely oversold territory. Most of the technical indicators, too, are in the oversold zone.
The Nifty formed a bullish engulfing candlestick on the daily chart that may lead to a pullback towards 16,400. On the downside, 15,800 will act as immediate support, while 15,500 will be critical support.
The Bank Nifty, too, is showing signs of relief, with a bullish piercing candlestick, where 34,000 will be an immediate hurdle and 35,000-35,500 the next critical resistance zone.
On the downside, 32,500-32,000 is the immediate demand zone, while 31,000 is the next major support.
Here are three buy calls for the next two-three weeks:
Lemon Tree Hotels: Buy | LTP: Rs 57.10 | Stop-Loss: Rs 53 | Target: Rs 65 | Return: 14 percent
The counter is outperforming the overall market by a big margin, therefore, it has strong relative strength. Technically, it is respecting its 200- day moving average (DMA) and moving in an upsloping channel formation.
On the upside, Rs 58-60 is an immediate resistance area, above this, we can expect a rally towards Rs 65-70.
On the downside, Rs 54-53 is an immediate demand zone. It is trading above its all-important moving averages with a positive bias in momentum indicators.
Inox Leisure: Buy | LTP: Rs 417 | Stop-Loss: Rs 390 | Target: Rs 460 | Return: 10 percent
The counter is moving in the upsloping channel on a longer time frame. On the daily chart, it took support at 200-DMA and then witnessed breakout of double bottom formation, however, we are seeing a consolidation above 50-DMA amid weakness in the overall market.
If it manages to sustain above Rs 420, we can expect bullish momentum to pick up towards Rs 460. Moving average convergence divergence (MACD) is trading above centerline whereas the relative strength index (RSI) is witnessing positive crossover after taking support at the 40 mark.
Avenue Supermarts: Buy | LTP: Rs 4,124 | Stop-Loss: Rs 3,850 | Target: Rs 4,700 | Return: 14 percent
The counter took support at 61.8 percent retracement of the previous rally from Rs 2,676 to Rs 5,900 and created a strong base around its 200-DMA. It is trading in a well-defined range of Rs 4,000-4,300 and there is a good chance of upside breakout.
If it manages to take out Rs 4,300, we can expect a rally towards Rs 4,700. Most of the momentum indicators are showing positive divergence.
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