Any sharp recovery above 11,300-11,350 levels, which will act as immediate resistance, can trigger another round of short covering till 11,450 levels.
In Tuesday's session, the Nifty reversed its nine sessions’ losing streak and, once again, reclaimed 11,200 levels, supported by gains in pharma, banking, and energy stocks.
From the derivative front, 11,100 and 11,000 levels are very crucial support levels for Nifty this week as Put writers are holding maximum open interest in these strikes.
From the technical front as well, the long-term moving average is placed around 11,000 levels on the daily charts, which will act as a major support for the index.
On the upside, 11,300-11,350 levels will act as immediate resistance, and any sharp recovery above these levels can trigger another round of short covering till 11,450 levels.
Till then, we expect the market to trade in the range of 11,000-11,300 levels with high volatility on cards and stock,specific action.
Here is a list of top three stocks which could give 5-11 percent return in the short term:
Bajaj Auto: Sell| Target: Rs 2,805| Stop Loss: Rs 3,040| Downside 5 percent
After a sharp rally from 2,830 to 3,100 levels, the stock has been maintaining its downtrend and is trading in a downward sloping channel with a formation of the lower-high and lower-bottom patterns on the daily charts.
The stock has moved well below its 61.8 percent of the Fibonacci retracement level from the swing high, which indicates that the short-term trend has entered into a bearish territory.
Moreover, the negative divergence in secondary oscillators also points towards a limited upside in prices. Traders can take a short position in the range of 2,950-2,945 for the downside target of 2,805 levels and a stop loss above 3,040.
DCB Bank: Buy| Target: Rs 239| Stop Loss: Rs 202| Upside 11 percent
On broader charts, the stock has been maintaining its uptrend and is trading in a rising channel with the formation of higher highs and higher bottom patterns.
However, for the last two weeks, the stock has been consolidating in a price range of Rs 210-220, which has formed a rectangle pattern on the daily interval.
In Tuesday’s session, we have observed a fresh breakout above the pattern formation along with a long build-up in prices.
The derivative data also points towards the next upswing at prices moving forward. So, traders can accumulate the stock in the range of Rs 215-218 for the upside target of 239 levels and a stop loss below Rs 202.
Titan Company: Buy| Target: Rs 1,245| Stop Loss: Rs 1,100| Upside 8 percent
The stock has been maintaining its uptrend since the beginning of the year and is trading in a rising channel on the broader charts.
In recent sessions, the stock made a Double Bottom pattern around 1,070 levels and bounced sharply once again to reclaim 1,150 levels.
At the current juncture, the stock has managed to break its previous resistance levels along with marginally-high volumes which suggest the next move in markets moving forward.
We believe that the bullish trend is likely to continue from here on. Traders can accumulate the stock on dips in the range of Rs 1,150-1,155 for the upside target of 1245 levels and a stop loss below Rs 1,100.
(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.
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