By Shitij Gandhi SMC Global Securities Ltd
The Nifty is once again trading near all-time highs, and at current levels, derivative data reflects that still there is a lot of short position in Nifty futures and the index calls is outstanding.
Moving forward, we can expect another round of short covering as per current derivative data which could push the index towards 11150-11200 mark this week as the market undertone remains bullish with the support of consistent long buildup and short covering.
The derivative data indicates that bullish scenario is likely to continue with Nifty having multiple strong supports at lower levels around 11000 & 11030 spot.
Currently, Nifty is moving up, with a decent addition in the open interest which indicates strength in the current trend. Option writers were seen active in the recent rally as we have seen put writing in 10800, 10900 & 11000 strikes along with the unwinding in calls.
We have been continuously seeing open interest addition post expiry which indicates long buildup. On the technical front, 11000-10980 spot levels are strong support zone and the current trend is likely to continue towards 11150-11200.
Here is a list of top 5 stocks which could give up to 20% return in the short term:
Automotive Axles Limited: BUY| Target Rs1980| Stop Loss Rs1575| Return 15%
The stock has given a breakout above Rs1500 levels in the recent past on the daily charts. Since then it has been consolidating in the range of 1650-1750 and formed a bullish flag formation on the daily interval.
In Tuesday’s session, the stock witnessed a fresh breakout above the pattern formation along with marginal higher volumes. Traders can accumulate the stock in a range of Rs1720-1740 for the target of Rs1980 with a stop loss below Rs1575.
Sasken Technologies Limited: BUY| Target Rs895| Stop Loss Rs700| Return 16%
The stock is maintaining its Bull Run and forming higher highs and higher lows on the daily and weekly interval. However, from last three weeks, prices were seen consolidating in range of 720-775 with consistent buying at lower levels.
This week stock has given consolidation breakout above the recent range along with positive divergence on the relative strength index (RSI) and stochastic indicator. Traders can accumulate the stock in a range of 770-785 for the upside target of 895 with a stop loss below 700.
Sterlite Technologies Limited: BUY| Target Rs464| Stop Loss Rs340| Return 20%
After recent breakout above 300 levels stock risen sharply and tested 400 levels in short span of time. At current juncture stock has formed diamond pattern formation on daily charts and given breakout above the same this week.
Moreover, a sudden rise in volume along with rising price reflects strength in the current trend. So, traders can accumulate the stock in a range of 385-395 for the target of 464 with a stop loss below 340.
Escorts Limited: BUY| Target Rs888| Stop Loss Rs750| Return 11%
The stock has been trading in a rising channel on the weekly interval and has formed higher highs and higher lows. On the daily charts, the stock has retraced back towards its 50-days exponential moving average due to profit booking and took support thereon.
Once again we saw a fresh break above the falling trend line has been seen as once again prices risen sharply above its short-term moving averages. Traders can accumulate the stock in a range of 800-811 for the target of 888 with a stop loss below 750.
Varun Beverages Limited: BUY| Target Rs800| Stop Loss Rs 635| Return 15%
The stock has risen sharply in the recent past from Rs520 levels to Rs720 levels in a short span of time. Since then, the stock retraced most of the gains and took support around 625 levels.
Due to recent retracement, the stock has formed a bullish flag formation on the daily interval. This week, the upside breakout has been witnessed above the pattern formation along with hefty volumes. Traders can accumulate the stock in a range of 695-710 for the target of 800 with a stop loss below 635.
Disclaimer: The author is Senior Research Analyst, SMC Global Securities Ltd. 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.
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