"The range of 10,300-10,500 levels for the Nifty will be crucial in the current expiry and the move is expected to remain volatile along with negative movement, as indicated by option open interest concentration," says Shitij Gandhi of SMC Global Securities Ltd.
By Shitij Gandhi
SMC Global Securities Ltd
After the recent short covering move seen in the opening of the week, the Nifty is trading near resistance level of 10,500 levels. The derivative data reflects that at current levels there is a lot of outstanding short position which is held in Nifty futures along with 10,500 and 10,600 call strikes.
Despite short covering rally we have not seen unwinding in 10,500 calls which indicates that the bearish scenario may continue.
The range of 10,300-10,500 levels will be crucial in the current expiry and the move is expected to remain volatile along with negative movement, as indicated by option open interest concentration.
If the Nifty50 falls below the 10,300 mark, it could correct to 10,100 levels on the back of further selling. However, on the bounce, the index will face strong resistance at 10,475-10,500 levels.
Overall data has turned slightly negative and more weakness can be seen in the expiry week. On the technical ground, the next support is placed around 10,300- 10,320 levels.
Here is a list of top three stocks which could give up to 14% return:
Trent Limited: BUY | Target: Rs 385| Stop loss: Rs 315| Return: 13%
After recovering sharply from lower levels, the stock has been consolidating in range of Rs 310-325 from the last four weeks which in turn formed a symmetrical triangle formation on the daily interval charts.
However, in Tuesday’s session, the triangle breakout along with marginally higher volumes has been witnessed which signals bullish momentum in coming sessions.
Traders can accumulate the stock in a range of Rs 340-350 levels for the target of Rs 385 and a stop loss below Rs 315.
Avenue Supermarts Limited: BUY | Target: Rs 1466| Stop loss: Rs 1240 | Return 11%
The stock has taken support at its 100-days exponential moving average (DEMA) on the daily charts and has risen sharply thereon to test Rs 1350 levels in the recent past.
Additionally, the stock has also formed an inverted head and shoulder formation on the daily interval charts. It also gave a breakout above the neckline of the pattern formation.
Traders can accumulate the stock in a range of Rs 1320-1340 for the upside target of Rs 1466 and a stop loss below Rs 1240.
V2 Retail Limited: BUY | Target: Rs 492| Stop loss: Rs 396| Return 14%
After testing Rs 500 in late 2017, the stock fell sharply down and slipped below its 200 days exponential moving average on daily charts. However, V-shaped recovery in prices has once again taken the stock above its short and long-term moving averages.
In Tuesday’s session, the stock has given symmetrical triangle breakout along with positive divergence on stochastic and RSI indicators.
Traders can accumulate the stock in a range of Rs 430-435 levels for the upside target of Rs 492 with a stop loss below Rs 396.Disclaimer: The author is 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.