Shitij Gandhi SMC Global Securities
Initial data indicates long rollover to August series which also reflects that at current levels there is a lot of outstanding short positions on the Nifty. So, we can expect another round of short covering ahead of July expiry.
As per current derivative data, the Nifty can move towards 11,200-11,220 levels this week as the market undertone remains bullish. We expect the bullish scenario to continue with the index having multiple supports at lower levels around 11,100 and 11,050 spot.
Options writers were seen active in the recent rally as we have seen put writing in 11,100 and 11,000 strikes along with the call unwinding.
We have been continuously seeing open interest (OI) additions post June expiry, which indicates long build-up. Among Nifty call options, the 11,200 strike call has the highest OI of more than 30 lakh shares. In put options, 11,000 strikes hold maximum OI of more than 50 lakh shares.
On the technical front, Nifty has a strong support at 11,100-11,080 spot levels. The current trend is likely to continue towards 11,200-11,220 in the expiry week.
Here is a list of top 3 stocks that could return 10-12 percent:
Exide Industries: Buy| Target: Rs 303| Stop Loss: Rs 252| Return 12%
The stock has been maintaining its uptrend ever since breakout above Rs 240 levels has been seen in the prices in the recent past.
However, after eight weeks of prolong consolidation in the range of Rs 245-270, the stock has once again given a fresh breakout last week along with marginally higher volumes.
Additionally, the fresh breakout has also been observed above the symmetrical triangle pattern which signifies that bulls are once again active in the scrip. Traders can accumulate the stock in a range of Rs 270-273 for the target of Rs 303 and a stop loss below Rs 252.
Apollo Tyres: Buy | Target: Rs 300 | Stop Loss: Rs 255| Return 11%
The stock has been trading in a downward sloping channel on the daily charts and slipped below its 200-day exponential moving average in the recent past, but V-shape recovery from lower levels has once again taken the stock above its falling trend line.
It surpassed its short and long-term moving averages as well. Additionally, the stock has also witnessed a breakout above the inverted head and shoulder pattern on the daily charts.
Traders can accumulate the stock in the range of Rs 270-275 for the upside target of Rs 300 and a stop loss below Rs 255.
ITC: Buy| Target: Rs 312| Stop Loss: Rs 267| Return 10%
After giving a breakout above the falling wedge pattern, the stock witnessed sharp up move in the recent past to test Rs 287 levels in Tuesday’s session. Additionally, the breakout above the inverted head and shoulder pattern has also been observed in the stock which will support for next up move in prices.
On the weekly charts as well, the stock has given a breakout above the key resistance level after prolonged consolidation in a broader range of 250-280.
All the factors are supporting for the next up move in prices. Traders can accumulate the stock in a range of Rs 283-286 for the upside target of Rs 312 levels and a stop loss below Rs 267.
Disclaimer: The author is a 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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