Markets gained for the sixth straight day to close at a four-month high. The Nifty gained 83 points to close at 18,148 on May 2.
Technically, the Nifty is in a strong bullish momentum, having seen breakout of an Inverse Head & Shoulder formation, where 18,200 is an immediate resistance. Above 18,200 levels, 18,350 will be the next target level. On the downside, 18,000 will act as the immediate support level; below this, 17,860 will be the next support level during any correction.
Bank Nifty is in a classical uptrend. It has successfully crossed the hurdle of 43,080; now 43,500 and 44,000 will be the next target levels. On the downside, 43,080 will be the first support level, and below this, 42,800 will be the next immediate support level.
If we look at the derivative data, the Put/Call ratio is sitting at 1.33, and FIIs have increased their long exposure to 43 percent in index futures. Overall, the market is continuing to favour short covering, and derivative data is exhibiting a positive bias.
Here are three buy calls for next 2-3 weeks:
AU Small Finance Bank: Buy | LTP: Rs 684 | Stop-Loss: Rs 650 | Target: Rs 740 | return: 8 percent
The counter has witnessed the breakout of a triangle formation with strong volume. It has formed a base at around Rs 550. The structure of the counter looks lucrative, as it is trading above all its important moving averages.
MACD (moving average convergence divergence) is supporting the current strength, whereas the momentum indicator RSI (relative strength index) is also positively poised.
On the higher side, Rs 700 is acting as an important psychological level; above this, we can expect a level of Rs 740+ in the near-short term, while on the lower side, it has already given a big move in the last 2 days from the lower levels, so the first support will come at around Rs 650 levels.
Garden Reach Shipbuilders & Engineers: Buy | LTP: Rs 496 | Stop-Loss: Rs 460 | Target: Rs 564 | Return: 14 percent
The counter has witnessed a breakout of the long consolidation of the last 18 days, and it has also given a massive breakout of the triangle formation with the strong volume on the daily chart. It faced trend-line resistance at around Rs 480, but the stock has broken these levels and moved towards a new leg of the rally.
On the upside, Rs 530 is facing the susceptible area; above this, one can expect a level of Rs 560 in the extended timeframe. On the downside, Rs 460 will be the important support level.
IndiaMART InterMESH: Buy | LTP: Rs 5,628 | Stop-Loss: Rs 5,200 | Target: Rs 6,188 | Return: 10 percent
The counter has been moving in an upsloping channel formation for the last 4 months. The previous breakout of Rs 5,200, which coincides with the 20-DMA (day moving average), has become an immediate and strong support level, while Rs 5,150 is the next major support level at any correction.
On the upside, its previous all-time high of Rs 5,700 is an immediate hurdle; above this, it is likely to head towards Rs 6,180+ levels.
MACD (moving average convergence divergence) is supporting the current strength, whereas the momentum indicator RSI (relative strength index) is also positively poised.
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