In the coming sessions, derivative data suggests 11,000 will act as crucial resistance for Nifty as call writers were seen active in 11,000 strike, whereas on downside 10,700-10,500 will be major support
D-Street witnessed a smart recovery ahead of November series futures and options expiry as the index managed to reclaim 10,850 on local bourses.
However, the December series started the month on a muted note with stock-specific action. The derivative data at current levels reflects that upward momentum will continue as the market undertone remains bullish with the support of consistent short covering and long buildup.
In the recent rally, we have observed put writing in 10,500-10,700 and 10,800 strikes that reflect strength in the current trend.
In the coming sessions, derivative data suggests 11,000 will act as crucial resistance for Nifty as call writers were seen active in 11,000 strike, whereas on downside 10,700-10,500 will be major support.
We expect markets to remain volatile this week and consolidate in the range of 10,700-11,000. However, any break above 11,000 will once again support further up move towards 11,100 as short sellers will be on the back foot.
As per the options data, 11000 call strike holds maximum open interest at over 27 lakh and 10,500 put strike holds the open interest of more than 35 lakh.
Here are 3 stocks that could return 9-11 percent in the next 1 month:
Tata Consultancy Services: Buy| Target: Rs 2,180| Stop loss: Rs 1,890| Return: 9 percent
After taking support at its 200-day exponential moving average, it formed a double bottom pattern on the daily charts. The stock witnessed a sharp short covering in prices and once again reclaimed Rs 2,000.
In Tuesday’s session, the stock has given a fresh breakout above the rectangle pattern along with positive divergence on secondary indicators. Traders can accumulate the stock in a range of Rs 2,000-2,015 for the upside target of Rs 2,180 and a stop loss below Rs 1,890.
TVS Motor Company: Buy| Target: Rs 611| Stop loss: Rs 525| Return: 9 percent
After testing Rs 480 in the recent past, the stock witnessed a sharp recovery from lower levels and has once again reclaimed Rs 550 in a short span of time.
On the daily charts, the stock has formed an inverted Head and Shoulder pattern and is on the verge of a breakout above its neckline. It has risen above its 100-day exponential moving average on the daily interval chart.
Any breakout in prices may further add upside momentum in prices that could take the stock higher. Traders can buy the stock above the breakout level of Rs 560 for an upside target of Rs 611 and a stop loss below Rs 525.
INOX Leisure: Buy| Target: Rs 250| Stop loss: Rs 210| Return: 11 percent
After making a double bottom pattern on the daily charts, the stock recovered sharply from lower levels and tested Rs 230. On daily charts, the stock has made a symmetrical triangle pattern and has managed to give breakout above the same this week.
The breakout has witnessed marginally higher volumes that suggest strength in the current move. Traders can accumulate the stock in a range of Rs 225-230 for an upside target of Rs 250 and a stop loss below Rs 210.
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.