Highly volatile moves were seen in the Indian market during the last few sessions as Nifty slipped towards the 13,150-mark from its record high on the back of profit-booking at higher levels.
However, a technical bounce on December 22 once again took Nifty above 13,450 and the IT sector along with the pharma counter supported the up move.
On the derivatives front, both Call writers and Put writers were seen active during the session. Put writers were seen adding hefty open interest at 13,300 and 13,200 strikes while 13,600 and 13,700 Call strikes also witnessed immense open interest build-up in the weekly contracts.
On the technical front, secondary oscillators suggest that volatility is likely to grip the market in the coming sessions.
The defensive counters like IT and pharma could witness follow-up buying while banking and financial names are expected to remain choppy.
On the higher side, 13,700 would act as a strong hurdle for Nifty with bias likely to remain rangebound along with high volatility.
Here are three buy calls for the next 2-3 weeks:
HCL Technologies | LTP: Rs 917 | Target price: Rs 1,009 | Stop loss: Rs 835 | Upside: 10%
After testing Rs 910 level in October 2020, this stock has been consistently moving in a broader range of Rs 800 to Rs 900 for the last two months.
This week, the stock has given a fresh breakout after a prolonged consolidation and moved above the key resistance level of Rs 910 to test its 52-week high of Rs 919.25.
On the technical front, the stock has formed a rounding bottom pattern on the daily charts and given a fresh breakout.
Rising volumes with rising prices hint at the next upswing in the prices. Traders can accumulate the stock in the range of Rs 900-915.
Pidilite Industries | LTP: Rs 1,725.95 | Target price: Rs 1,905 | Stop loss: Rs 1,580 | Upside: 10%
The stock has been consistently moving higher and can be seen trading in a rising channel with the formation of higher highs and higher bottom.
On the weekly charts, the stock is holding well above its short and long-term moving averages.
At the current juncture, the stock is on the verge of a fresh breakout above the key resistance level of Rs 1,720.
Rising volumes with rising prices hint at a long build-up in the stock. Traders can accumulate the stock in the range of Rs 1,700-1,720.
This stock has been consistently moving higher and seen trading in a rising channel on the daily and weekly intervals.
At the current juncture, the stock has formed a Cup and Handle formation on the daily charts and given a fresh breakout above the pattern formation with marginally higher volumes.
Positive divergences on secondary oscillators also support the next up-move in the prices. Traders can accumulate the stock in the range of Rs 3,550-3,575.
(The author is a Senior Technical Analyst at SMC Global Securities)
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