Hot Stocks | Info Edge, Dr Lal Path Labs & Mahanagar Gas could return up to 12% in short term

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Ashish Chaturmohta

Nifty closed at 12,055.80, down 0.52 percent, on January 28 tracking weak global cues.

After trading in a range of 12,270-12,180 odd levels during the five sessions, the index has seen a breakdown from the range indicating the resumption of correction.

Now, the immediate support is seen at 12,000 where rising support trend line connecting lows of 11,832 and 11,930 are seen.

Breaking below 12,100, the next support is seen at 11,800 and then 11,630. On the upside, resistance is at 12,270 which needs to be crossed and sustained on the tradable basis for an upmove towards 12,400-12,500.

In Nifty January monthly expiry options, maximum put open interest is seen at strike price 12,000 and 11,500, while the maximum call open interest is seen at 12,200, followed by 12,300.

A significant amount of call writing was seen at strike price 12,100 and immediate strikes, indicating overhead resistance for the market at 12,100-12,200 and support at 11,900.

India VIX closed at 17.3, up by 0.7 percent for the day. India VIX is expected to remain at elevated levels as the market approaches Budget this week.

Here are three buy calls for the next 3-4 weeks:

Info Edge (India) | Buy | LTP: Rs 2,762.50 | Target: Rs 3,080 | Stop loss: Rs 2,660 | Upside: 11.49%

The stock saw an upmove from Rs 1,836 to hit a high of Rs 2,740 in November last year. Subsequently, the stock went into a sideways trading range, consolidating its gains after the upmove.

Now, the stock has given breakout on the upside with strong momentum and volumes, indicating the resumption of an uptrend.

Price has given breakout on the upside from Bollinger Band with an expansion of bands, indicating the continuation of the trend in the direction of breakout on the daily chart.

MACD line has moved above the equilibrium level of zero on the daily chart. The Average Directional Index (ADX) line, which is the indicator of trend strength, has moved above the equilibrium level of 20 with rising 'Plus Directional' line on the daily chart.

The stock can be bought at current levels and on dips to Rs 2,725.

Dr. Lal Path Labs | Buy | LTP: Rs 1,760 | Target: Rs 1,980 | Stop loss: Rs 1,695 | Upside: 12.5%

Since November last year, the stock had been consolidating between Rs 1,700 and Rs 1,450 odd levels after a strong upmove.

It has formed a bullish inverted head and shoulders patterns over a three-month period on the daily chart.

Volumes on the upmove were above average, indicating buying participation in the stock.

Now, the stock has given breakout on upside, indicating the resumption of the uptrend. Price has given breakout on the upside from Bollinger Band with an expansion of bands, indicating the continuation of the trend in the direction of breakout on the daily chart.

MACD line has given positive crossover with its average above equilibrium level of zero on daily as well as a weekly chart. The stock can be bought at current levels and on dips to Rs 1,745.

Mahanagar Gas (MGL) | Buy | LTP: Rs 1,240.85 | Target: Rs 1,375 | Stop loss: Rs 1,175 | Upside: 10.81%

The stock witnessed consolidation at lower levels between Rs 1,065 and Rs 755 for almost one year.

It has formed a bullish double bottom reversal pattern on the weekly chart. The stock has given breakout from the pattern on strong momentum and high volumes, indicating the start of a fresh uptrend.

Price has given breakout on the upside from Bollinger Band with an expansion of bands, indicating the continuation of the trend in the direction of breakout on daily as well as the weekly chart.

MACD line has moved above the equilibrium level of zero on the weekly chart. The stock can be bought at current levels and on dips to Rs 1,210.

(The author is Head - Technical and Derivatives, Sanctum Wealth Management)

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.