Shitij Gandhi
After four days of losess, Nifty showed strength on Tuesday and managed to surpass 11,000-mark on the back of sharp short-covering.
Rally was supported by heavyweights, including HDFC Bank and Reliance Industries. On the derivative front, short-covering was witnessed by call writers at 11,000 strike while put writers added nearly 2.5 lakh shares at the same strike.
On the technical front, Nifty is still trading well above its short and long-term moving averages. Bank Nifty may face strong hurdles at 21,800 to 22,000 zone.
In the coming sessions, we believe that volatility may grip the markets but bias would remain bullish as far as Nifty is trading above 10,950.
On the higher side, a break above 11,200 would once again add follow-up buying in the index so any dip in the prices should be considered as a buying opportunity.
Here are three buy calls for the next 2-3 weeks:
Hatsun Agro Product | Buy | LTP: Rs 710 | Target price: Rs 817 | Stop loss: Rs 640 | Upside: 15%
Since last month, the stock has been consolidating in the range of Rs 600 to 700, but holding above its short and long-term moving averages on the daily and weekly intervals.
At the current juncture, the secondary oscillators are showing positive divergences on the daily intervals along with a rise in price with volume.
On the weekly charts as well, the stock has almost given a V-shape recovery from its recent lows, holding well above its 200-days exponential moving average which suggests a limited downside in the stock.
Traders can accumulate the stock in the range of Rs 704-708 levels for the upside target of Rs 817.
Birla Corporation | Buy | LTP: Rs 635 | Target price: Rs 700 | Stop loss: Rs 580 | Upside: 10%
The stock has been trading well above its 200-days exponential moving average on the daily charts and can be seen trading in a rising channel on the weekly interval as well with the formation of a higher bottom pattern.
This week, the stock has given a breakout after a prolonged consolidation of more than four weeks within the range of Rs 550-620.
The rising volumes along with the consolidation breakout suggest the next upside in the prices, going forward.
Traders can accumulate the stock in the range of Rs 625-635.
In the recent past, the stock has given a V-shape recovery from the lows of Rs 1,150 and once again managed to surpass its short and long-term moving averages on the daily interval.
At the current juncture, the stock has been consolidating in a broader range of Rs 1,600-1,800 from the last more than ten weeks.
However, this week, it has managed to give breakout above the consolidation zone along with marginally higher volumes, with the addition of open interest from derivatives front as well.
The data suggests a long build-up in the stock. Traders can accumulate the stock in the range of Rs 1,795-1,807.
(The author is Senior Technical Analyst at SMC Global Securities)
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