Nifty50 index extended gain after surpassing its first band of resistance at 17,100 levels being the 50-week average and rose to 4-month high subsequently around 18,000 levels. The index may face hurdle around 18,100-level, which coincides with its high it tested in first week of April 2022.
The key technical indicators are positively poised on long-term as well as medium-term timeframe charts, while due to steady rise, its short term indicators stuck around the overbought zone. Daily RSI (relative strength index) is trending higher near to 84 levels and any negative news flow from the global markets could witness some corrective action to 17,600-level initially and 17,200-level being the band of short term averages. A stable move above 18,200 levels could lead the index towards scaling a new all-time high at 18,600-levels.
The weekly expiry could keep the markets volatile as we have witnessed steady rise in open interest in 18,000 CE strike in the past few days, while on the downside 17,800 PE strike has the highest open interest of more than 2,20,000 contracts which could act as immediate support from current levels.
Here are three buy calls for next 2-3 weeks:
HCL Technologies: Buy | LTP: Rs 980 | Stop-Loss: Rs 910 | Target: Rs 1,100 | Return: 12 percent
The stock bounced after testing its 50 percent Fibonacci Retracement level of prior up-move (Rs 375-1,378), which was placed at Rs Rs 878 and closed 4 percent month-to-date (MTD).
We believe that inside range formation on the weekly timeframe chart and higher bottoms on the daily chart has given an breakout from its short-term moving averages.
Its weekly RSI turned upwards from the lower levels and other key technical indicators on short-term timeframe chart are positively poised.
Thus, a long position can be initiated for the target of Rs 1,100 and a stop loss of Rs 910.
Polycab India: Buy | LTP: Rs 2,457.60 | Stop-Loss: Rs 2,250 | Target: Rs 2,675 | Return: 9 percent
The stock has crossed its medium and long-term moving averages with a sharp volume and closed 2 percent higher (W-o-W basis).
Convergence of its 20-week and 50-week EMAs (exponential moving averages) has confirmed a breakout on the higher side to test its intermediate high.
Its weekly RSI is trading above the average line indicating a sharp up move on the higher side. Thus, a long position can be initiated for the target of Rs 2,675 and a stop loss of Rs 2,250.
Biocon: Buy | LTP: Rs 317 | Stop-Loss: Rs 298 | Target: Rs 365 | Return: 15 percent
The stock is trading in an inside range over the past 3 weeks after a sharp breakdown from its recent high of Rs 388 levels.
Crossover of its short and medium term averages confirms a positive breakout in line with the sector.
Multiple double bottoms Rs t 305 levels would be protected and offers a good risk reward ratio from current levels.
Thus, a long position can be initiated for the target of Rs 365 and a stop-loss of Rs 298.
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