Shitij Gandhi
After ending October series on a negative note, Nifty witnessed a sharp recovery from lower levels. However, it majorly was led by short covering. Option call writers covered their short positions and put writers were seen actively selling puts in this rally.
We have seen put writing in 10,200, 10,300 and 10,400 strike puts which clearly indicates that bulls are now trying to take control over the market.
The derivatives data has turned positive hereon as we are seeing maximum put open interest buildup of more than 50 lakh shares at 10,000 put strikes which should act as strong support zone.
Next week, Nifty is most likely to trade in the range of 10,450-10,650 but with a positive bias. The Nifty has multiple support at lower levels which are placed at 10,450-10,400 spot levels. Among Nifty Call options, the 10,700-strike call has the highest open interest of more than 25 lakh shares.
Here is a list of top three stocks which could give 10-14% return in the next 1 month:
Mangalore Refinery and Petrochemicals: Buy| Target: Rs 94| Stop Loss: Rs 75| Return 14%
After a V-shaped recovery from lower levels, the stock surpassed its short-term moving averages and has been consolidating in the range of Rs 78-85 for last three weeks.
The consolidation in prices has formed a flag pattern on the daily charts. This week, we have observed positive divergence in the secondary indicators along with hefty volumes which suggest next up move in prices moving forward.
Traders can accumulate the stock in a range of Rs 82-83 for the upside target of Rs 94 with a stop loss below Rs 75.
Ashok Leyland: Buy| Target: Rs 133| Stop Loss: Rs 110 | Return 12%
The stock made a double bottom pattern on daily charts around Rs 105 and recovered sharply thereon towards Rs 121. Additionally, the stock has given breakout above the symmetrical triangle pattern after consolidating in the range of Rs 110-120 for more than three weeks.
On the weekly charts as well, the stock has managed to close above its 100-day exponential moving average which is again a positive signal. Traders can accumulate the stock in a range of Rs 118-120 for the upside target of Rs 133 with a stop loss below Rs 110.
V-Guard Industries: Buy| Target: Rs 210| Stop Loss: Rs 178| Return 10%
After falling sharply from Rs 220 levels towards 160 levels, the stock made a W pattern and surpassed its short-term moving averages on the daily charts. The breakout in prices can also be seen on monthly and weekly charts along with marginally higher volumes.
The buying momentum has once again picked up and the stock is on verge of a fresh breakout above the W pattern. Traders can accumulate the stock on dips around Rs 192-190 for the upside target of Rs 210 levels and a stop loss below Rs 178.
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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