On the technical front, 10,650-10,700 spot is a strong support zone for the index
The Nifty50 has started the week on a muted note with some stock-specific action. But, on the derivatives front, the data has turned mildly positive as we are observing addition of open interest (OI) in 10,700 and 10,500 Put strikes.
The maximum Put open interest is placed at 10,500 with OI of more than 40 lakh shares and that should act as strong support zone for the Nifty, moving forward.
Among Nifty Call options, the 11,000-call strike has the highest open interest of more than 38 lakh shares which will act as stiff resistance for the index.
We expect that Nifty will most likely trade in the range of 10,680 to 10,900 spot with some volatility this week, but any decisive move above 11,000 in coming days will definitely add further buying momentum towards 11,100 levels.
On the technical front, 10,650-10,700 spot level is a strong support zone for the index and the current bounce is likely to continue towards 10,850-10,900 levels.
Here is a list of three stocks that could give 9-12% return in the next 12 months:
Titan Company: Buy| Target: Rs 1025| Stop Loss: Rs 885| Return 9%
The stock has taken support at its 100-days exponential moving average (EMA) on the daily charts and took a V-shaped recovery from 870 levels to once again reclaim the momentum above its short-term moving averages.
From the last six weeks, the stock has been consolidating in a broader range of Rs 870-945 along with consistent buying at lower levels.
This week, we have observed a fresh breakout in prices above the key resistance level of 945 along with positive divergence in secondary oscillators. Traders can accumulate the stock in the range of 935-945 for the upside target of 1025 levels and a stop loss below 885.
Indian Bank: Buy| Target: Rs 278| Stop Loss: Rs 240| Return 9%
The stock made a double bottom pattern around Rs 210 levels on the daily charts and bounced back towards 250 levels once again.
This week we have observed a fresh breakout of last three weeks consolidation along with a breakout above the ascending triangle pattern on daily charts. Traders can accumulate the stock in a range of 255-257 for the upside target of 278 levels and a stop loss below Rs 240.
Repco Home Finance: Buy| Target: Rs 471| Stop Loss: Rs 390| Return 12%
The stock has given breakout, after a prolonged consolidation of more than two weeks along with price rising above its 100 days exponential moving average on a daily interval.
On the broader structure as well the stock is also building up a “W” pattern on the technical ground which is again a bullish signal. So, traders can accumulate the stock in a range of Rs 420-430 for the upside target of Rs 471 levels and a stop loss below Rs 390.
(The author is a Senior Research Analyst, SMC Global Securities)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.