Tailing the previous week's gains, the Indian market extended the rally into this week as well, with Nifty once again surpassing 11,650 levels, backed by sharp gains in the auto, IT and banking sector.
On the derivatives front, put writers were seen shifting to higher bands while call writers were seen unwinding the positions which point towards more upside in the index for the upcoming sessions.
On the higher side, 11,800 would be the immediate hurdle for Nifty while the 11,600 to 11,550 zone will act as major support.
Bank Nifty is looking much positive on charts after giving an almost V-shaped recovery from 20,500 levels as positive divergences on secondary oscillators suggest the next up-move may be extended till 23,300 levels in the upcoming few sessions.
For this week, bias is likely to remain bullish and any dip in the prices should be used to create fresh longs.
Here are three buy calls for the next 2-3 weeks:
For the last four months, the stock has been consistently moving lower in a downward sloping channel with the formation of a lower high and lower bottom pattern.
However, this week, the stock has once again moved back above its short-term moving averages with a breakout above the falling trendline of the sloping channel.
The breakout can be seen with rising volumes and positive divergences on secondary oscillators.
Traders can accumulate the stock in the range of Rs 1,190-1,196.
Manappuram Finance | Buy | LTP: Rs 168 | Target price: Rs 185 | Stop loss: Rs 153 | Upside: 10%
For the last eight weeks, the stock can be seen consolidating in the range of Rs 165-140, along with consistent buying around support levels.
On the daily charts, prices are holding above 200-days exponential moving average on the daily charts.
This week, the stock has given a breakout above the key resistance level of Rs 165 after a prolonged consolidation of nearly two months.
Additionally, the stock has also formed a W-pattern on the daily interval which suggests further upside in the prices.
Traders can accumulate the stock in the range of Rs 165-168.
Tata Motors | Buy | LTP: Rs 144.45 | Target price: Rs 158 | Stop loss: Rs 130 | Upside: 9%
The stock has been consistently moving higher on weekly charts with prices trading in a rising channel with the formation of a higher high and higher low pattern.
A few weeks back, the stock fell from Rs 155 to Rs 125 and took support at its 200-days exponential moving average on the daily interval.
On the technical front, it formed a double bottom pattern and bounced back sharply above its short-term moving averages to once again surpass Rs 140.
At the current juncture, the stock has given a breakout above the falling trendline of the downward sloping channel on the short-term charts.
The breakout has occurred with very high volumes which suggest the next up-move in the prices.
Traders can accumulate the stock in the range of Rs 141-145.
(The author is Senior Technical Analyst at SMC Global Securities)
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