Santosh Meena, Head of Research at Swastika Investmart
There are signs of reversal in the market after a healthy correction. The first day's low or high of the new series acts as strong support and resistance throughout the series. Friday's low of 17,647 therefore has become a sacrosanct reference point for the bulls.
On the upside, 17,450 will be an immediate hurdle and 17,600-17,800 will be the next resistance levels.
Foreign institutional investors (FIIs) started the October series with 87 percent short positions in the index future which is an extremely oversold territory; it also means the market is hedged which will limit the downside and there will be scope for a short covering rally.
Bank Nifty managed to close above its 50-day moving average (38,994) and is ready to move towards its 20-DMA which is placed around the 39,700 level. On the downside, 38,500 will act as a strong support level.
Here are three buy calls for next 2-3 weeks:
Apar Industries: Buy | LTP: Rs 1,435.55 | Stop-Loss: Rs 1,300 | Target: Rs 1,600 | Return: 11 percent
The market is in strong bullish momentum, coming out of short-term consolidation with a breakout of the bullish flag formation. We are seeing a fresh expansion phase, with Rs 1,600 as an imminent target.
On the downside, Rs 1,335 is an immediate support level. We can see a positive crossover in both RSI and MACD and there is still scope for further upside before they turn overbought.
Campus Activewear: Buy | LTP: Rs 596.25 | Stop-Loss: Rs 560 | Target: Rs 666 | Return: 12 percent
The counter is moving in a classical upsloping channel formation with an immediate base at 20-DMA. It witnessed a bullish pin bar candlestick pattern at 20-DMA during the recent pullback.
The previous swing high of Rs 616 is an immediate hurdle; above this, we can expect a rally towards Rs 666 level.
On the downside, the 20-day moving average (DMA) will act as strong support which is currently placed at Rs 555 level. RSI (relative strength index) has witnessed a positive crossover from the 55 support level and MACD is trading above the centerline.
Lemon Tree Hotels: Buy | LTP: Rs 91.1 | Stop-Loss: Rs 84 | Target: Rs 106 | Return: 16 percent
The counter is in a strong uptrend and we are seeing a breakout of bullish flag formation. It is trading above all-important moving averages and 20-DMA is providing immediate support.
On a weekly time frame, it managed to close above the multi-month hurdle of Rs 90, which may lead to a fresh expansion phase. Momentum indicators are positively poised to support the current momentum.
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