Traders should use any dip for creating fresh longs positions as long as we are trading above 11,250 in Nifty (spot).
Indian markets extended gains for the third consecutive session with Nifty testing the two-week high to reclaim 11,400 levels on the back of a sharp surge in auto and metal stocks.
From the derivative front, the open interest (OI) build-up was seen at 11,300 put strike along with call unwinding in 11,400 strikes.
But, there are a lot of outstanding positions which are held with call writers, and we might witness another round of short-covering in coming sessions which can take the index towards 11550 levels.
On the downside, 11,300-11,280 will act as a major support for Nifty.
From the technical front as well, Nifty has almost witnessed a V-shaped recovery from 11,100 levels as the index is now holding above its long-term moving averages on the daily interval.
We believe that at the current juncture, traders should use any dip for creating fresh longs positions as long as we are trading above 11,250 in Nifty (spot).
Here is a list of top three stocks which could give 5-13% return in the next three-four weeks:
Kotak Mahindra Bank Ltd: Buy | LTP: Rs 1,614.80 | Target: Rs 1,729 | Stop Loss: Rs 1,520 | Upside 7 percent
After witnessing a stunner rally from Rs 1,450 to Rs 1,650 in the recent past, the stock has been consolidating in a broader range of Rs 1,550-1,650 from the last two weeks.
The consolidation has formed a symmetrical triangle pattern, and we have observed a fresh breakout above the same this week.
The positive divergence on secondary oscillators along with fresh breakout can add further buying momentum into the prices in the coming sessions.
Traders can accumulate the stock in a range of Rs 1,600-1,615 for the upside target of Rs 1,729 levels with a stop loss below Rs 1,520.
Jubilant Foodworks Ltd: Buy | LTP: Rs 1,316.85 | Target: Rs 1,490 | Stop Loss: Rs 1,260 | Upside 13 percent
In the recent past, the stock took a sharp move from Rs 1,100 levels to test Rs 1,500 levels in a short period. However, since then, profit booking at higher levels has once again taken prices towards Rs 1,300 levels.
On the daily charts, the stock is continuously maintaining above its short as well as long-term moving averages and can be seen trading in a rising channel.
At the current juncture, a fresh breakout above 1,340 levels can add further upside into the prices towards its recent highs.
Traders can buy the stock above the breakout level of Rs 1340 for the upside target of Rs 1490 levels, and a stop loss below Rs 1260.
Adani Enterprises Ltd: Buy| LTP: Rs 155.05| Target: Rs 164| Stop Loss: Rs 135| Upside 5%
The stock has been consistently maintaining above its long-term moving averages on the daily interval and is seen trading in a rising channel with a formation of the higher highs and higher bottom.
On the broader structure, the stock has formed a cup and handle pattern and had also given a breakout above the same this week.
The volumes along the breakout are seen marginally higher than average volumes, which suggest long build-up into the prices.
Traders can accumulate the stock on dips in the range of Rs 145-150 levels for the upside target of Rs 164 levels, and a stop loss below Rs 135.
(The author is a Senior Research Analyst, SMC Global Securities Ltd)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.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.