After scaling record highs last week, the Indian market began this week on a muted note ahead of Christmas and December month's future and options expiry.
Both the indices largely remained flat during Tuesday’s session, eventually ending negative due to profit-booking in stocks like Reliance Industries, HDFC twins, ICICI Bank and TCS.
On the derivative front, both call and put writers remained active during the week. On put side, 12,200 strike witnessed an addition of open interest while 12,300 call strike holds the maximum open interest of more than 36 lakh shares.
On the technical front, at the current juncture, the divergences on secondary oscillators suggest further consolidation as the overall market is trading in the highly overbought zone on daily and weekly intervals.
However, the market's mood is still bullish on broader charts so we advise using any dip for creating fresh longs.
Here are three buy calls for the next three-four weeks:
Larsen & Toubro Infotech | Buy | LTP: Rs 1,770.15 | Target: Rs 1,910 | Stop loss: Rs 1,660 | Upside: 8 percent
After surpassing its long-term moving averages on daily charts in October 2019, the stock went into the phase of consolidation and was seen trading in a broader range of Rs 1,600-1,720.
However, in the last week, the stock gave a breakout along with marginally higher volumes, after a prolonged consolidation of more than eight weeks.
On the technical front, the breakout has been witnessed above the rectangle pattern on weekly charts which suggests more upside into the prices. Traders can accumulate the stock in the range of Rs 1,750-1,760.
GM Breweries | Buy | LTP: Rs 444.25 | Target: Rs 498 | Stop loss: Rs 410 | Upside: 12 percent
After testing Rs 350 on the downside in September 2019, the stock has been consistently recovering from its lows and seen trading in a rising channel on daily and weekly intervals with the formation of higher high and higher bottom pattern.
At the current juncture, the stock has given a fresh breakout on multiple time frames with marginally higher volumes. On the daily charts, a breakout above the Cup and Handle pattern can be seen which is bullish in nature.
Traders can accumulate the stock in the range of Rs 440-445.
Cipla | Buy | LTP: Rs 478.70 | Target: Rs 515 | Stop loss: Rs 450 | Upside: 8 percent
The stock has been consistently trading in a broader range of Rs 440-490 from the last two months. The volatility was seen in the recent past as the stock has witnessed huge swings into the prices.
At the current juncture, the breakout above the Diamond pattern can be visible on daily charts along with marginally higher volumes and positive divergences on secondary oscillators.
Additionally, the stock has also managed to close above its 100-day exponential moving average on daily charts which points towards more upside into the prices. Traders can accumulate the stock in the range of Rs 474-478.
(The author is Senior Technical Analyst at SMC Global Securities)Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.