Bulls made a strong comeback in Tuesday's session as the Indian market recovered sharply from the recent lows. Nifty50 index once again reclaimed 17,800 levels as energy sector along with IT counters supported the up move.
On the derivatives front, Call writers were seen unwinding their short positions at 17,700 & 17,800 strike, while Put writers added hefty open interest at 17,600 & 17,500 strike.
On the technical front, both the indices - Nifty and Bank Nifty - managed to hold above their 20-day exponential moving average on daily charts and traded in a rising channel. For the coming sessions, 18,000 will act as a key psychological resistance for Nifty while 38,000-38,150 zone would be immediate hurdle for banking index.
We expect the market to trade with a bullish bias in the upcoming week as long as Nifty holds above the 17,400-mark. Traders should use any dip to create fresh longs.
Here are three buy calls for next 2-3 weeks:
REC: Buy | LTP: Rs 161.65 | Stop Loss: Rs 148 | Target: Rs 181 | Return: 12 percent
The stock made its 52-week high of Rs 167.80 in June and since then prices have been under pressure. The stock tested the levels of Rs 140 in the recent past.
At the current juncture, however, once again the stock has managed to surpass above its 100-day exponential moving average on the daily time frame with a breakout above an Inverted Head and Shoulder pattern on broader charts.
On the short-term charts, the stock has also given a breakout above ascending triangle pattern which suggests next up move in the prices. Traders can accumulate the stock in a range of Rs 160-162 for an upside target of Rs 181 with stop loss below Rs 148.
Supreme Petrochem: Buy | LTP: Rs 757.20 | Stop Loss: Rs 670 | Target: Rs 885 | Return: 17 percent
From last one month, the stock has been consolidating in broader range of Rs 670-710 with prices holding above its 100 & 200 days exponential moving average on daily interval. This week the stock has managed to give breakout above the key resistance level of Rs 710 levels after a prolong consolidation phase.
The positive divergences on secondary oscillators suggests that momentum is likely to carry in upcoming sessions as well. Traders can accumulate the stock in range of Rs 750-758 levels for the upside target of Rs 885 levels with stop loss below Rs 670.
Tamilnadu Petroproducts: Buy | LTP: Rs 137.75 | Stop Loss: Rs 120 | Target: Rs 160 | Return: 16.2 percent
Ths stock has been maintaining its uptrend and can be seen trading in a rising channel with formation of higher high and higher bottom pattern on daily and weekly charts. At current juncture the stock has given a breakout above the ascending triangle pattern on daily interval.
The breakout is observed with marginally higher volumes, which suggests a long build up into the prices. Additionally the stock has also formed a rounding bottom pattern on weekly interval, which again points towards next up leg into the prices.
Traders can accumulate the stock in range of Rs 135-137 levels for the upside target of Rs 160 levels with stop loss below Rs 120.Disclaimer: The views and investment tips expressed by investment expert 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.