On the technical front, we believe that bullish momentum will continue towards 11,700 levels in the coming sessions and every dip should be used as a buying opportunity.
The Nifty50 index surged to multi-week highs to climb above 11,500 mark along with BankNifty which ended at a fresh closing high.
The bull run extended for the seventh consecutive session in a row on the back of sustained buying in midcaps, smallcaps as well as banking stocks.
However, on the derivatives front, options data suggests that there is still a lot of outstanding short positions which are held within index calls and we can expect another round of short covering in the coming week.
As per option chain, 11,500 call strikes holds with the maximum open interest of nearly 26 lakh shares and at the current juncture, the call option writers at 11,500 strike may not feel comfortable as Nifty closed above 11,500 mark.
The fresh addition of open interest has also been observed in 11,500 and 11,400 put strike which clearly indicates that bears are clearly on the back foot now.
On the technical front, we believe that bullish momentum will continue towards 11,700 levels in the coming sessions and every dip should be used as a buying opportunity. The immediate support for Nifty is now placed at 11,450-11,400 mark.
Here is a list of top three stocks which could give 8-10% return in next 1 month:
Siemens: Buy| Target: Rs 1,140| Stop Loss: Rs 980| Upside 9%
The stock has taken support around Rs 940 levels in the recent past and took a V-shaped recovery to once again reclaim above its long-term moving averages.
From the technical front, the stock has formed an inverted head and shoulder pattern on the daily charts and is on the verge of a breakout above the neckline of the pattern formation.
So, traders can accumulate the stock in the range of Rs 1040-1050 for the upside target of Rs 1140 levels with a stop loss below Rs 980.
Asian Paints: Buy| Target: Rs 1,568| Stop Loss: Rs 1,385| Upside 8%
The stock has been maintaining its bull trend on broader charts and last week a breakout in prices has been observed after a prolonged consolidation.
While this week, the follow-through buying has emerged into prices once again as the stock has given a breakout above the symmetrical triangle pattern on daily interval along with positive divergence on secondary oscillators.
Traders can accumulate the stock in a range of Rs 1450-1455 for the upside target of Rs 1568 levels with a stop loss below Rs 1385.
Havells India: Buy| Target: Rs 837| Stop Loss: Rs 715| Upside 10%
The stock has been maintaining its bullish trend and seen trading in a rising channel with the formation of higher highs and higher low pattern on a daily & weekly interval.
This week we have observed a fresh breakout in prices above the bullish flag pattern which can trigger next up move in prices moving forward.
So, traders can accumulate the stock in a range of Rs 760-765 for the upside target of Rs 837 levels with a stop loss below Rs 715.
(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.