The Indian equity benchmarks have overlooked the weakness in global markets and used the recent dip as a buying opportunity. Foreign institutional investors (FIIs) are in the mood to invest in the Indian market despite recent outperformance, triggering a sharp rally and a remarkable appreciation in the rupee.
Short-covering in the F&O market is another reason for the powerful rally. The market is heading into the festival season on an exciting note and there is a good chance that the Sensex and the Nifty may hit new highs ahead of Diwali.
The 38.2 percent retracement of the previous rally is placed around 16,900, while the 200-daily moving average (DMA) is placed at around the 17,000 mark, therefore, the downside is protected in the 17,000-16,900 zone.
On an immediate basis, 18,000 is a psychological hurdle, while the previous swing low of 17,161 is acting as a strong support level.
Here are three buy calls for the next two-three weeks:
Tejas Networks: Buy | LTP: Rs 615.65 | Stop-Loss: Rs 550 | Target: Rs 744 | Return: 21 percent
The counter is coming out of a long consolidation with strong volume and witnessed a breakout of ascending triangle pattern. The pattern suggests an immediate target of Rs 744, while it has the potential to move further higher.
On the monthly chart, there is a breakout of Bullish Flag formation and it is a classic case of breakout followed by a long accumulation process.
On the downside, Rs 550 will act as immediate support. Moving average convergence divergence (MACD) is supporting the current strength, whereas momentum indicator the Relative Strength Index (RSI) is also positively poised.
Praj Industries: Buy | LTP: Rs 421 | Stop-Loss: Rs 378 | Target: Rs 514 | Return: 22 percent
The counter has a strong bullish setup where it witnessed a breakout of symmetrical triangle formation on the longer timeframe. It looks lucrative on the daily chart, as it is trading above all important moving averages.
Momentum indicators are positively poised to support the current strength of the trend. On the upside, Rs 450 is the immediate target, above this, Rs 514 is the next target in the near term. On the downside, Rs 378 is an important support level.
UNO Minda: Buy | LTP: Rs 578 | Stop-Loss: Rs 545 | Target: Rs 660 | Return: 14 percent
The counter is witnessing a breakout of a bullish inverse head and shoulder formation, which suggests fresh highs in this counter. It is respecting its 20-DMA beautifully and trading above its all-important moving averages.
The previous swing high of Rs 630 is an immediate hurdle then Rs 660 and Rs 700 are the next target levels.
RSI is witnessing positive crossover after taking support at the 50 mark, while MACD is trading in positive territory.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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