Indian markets began this week on a positive note and bulls keep control over the markets taking cues from firm global sentiments.
IT and pharma counters outperformed the markets while banking stocks still felling pressure.
As far as Nifty is concerned, now 11,400 to 11,350 zone would act as a major support for the index moving forward while on the higher side 11,650-11,700 zone will act as an immediate hurdle.
Derivative data suggests the bias is likely to remain bullish in the upcoming sessions, as put writers were seen shifting to higher bands and observed adding hefty open interest at 11,400 strikes.
On the technical front, however, Bank Nifty is still likely to remain under pressure as 22,800 levels would be a strong hurdle and may cap any sharp upside in the prices.
Overall, we expect markets to remain volatile in the coming week and traders should keep stock-specific action on the radar.
Here are three buy calls for the next 3-4 weeks:
India Cements | Buy | LTP: Rs 124.90 | Target price: Rs 138 | Stop loss: Rs 110 | Upside: 10.5%
In May 2020, the stock rose sharply above its 200-days exponential moving average on the weekly charts and tested Rs 140 levels.
However, since then, it went into consolidation and can be seen trading in the range of Rs 110-130 with the formation of lower high and lower bottom patterns which has formed a triangle pattern on weekly charts.
This week, we have observed a fresh breakout above the falling trend line of a downward sloping channel along with marginally higher volumes which suggest the next up-move in the prices, moving forward.
CESC | Buy | LTP: Rs 671 | Target price: Rs 772 | Stop loss: Rs 605 | Upside: 15%
This week, the stock has given a consolidation breakout on various intervals after spending nearly four months in the range of Rs 550 to Rs 650 with multiple ups and downs.
Additionally, the stock has also formed an inverted head and shoulder pattern on the daily interval with breakout observed above the neckline of the pattern formation.
Furthermore, the stock has also managed to close above its 200-days exponential moving average on the daily charts which suggests the next upside in the prices, moving forward.
Jyothy Laboratories | Buy | LTP: Rs 153.95 | Target price: Rs 173 | Stop loss: Rs 137 | Upside: 12%
The stock has been consistently maintaining its bull run ever since it has given a breakout above Rs 130 levels.
Additionally, prices are holding well above the 200-days exponential moving average on the daily charts with consistent buying seen at support levels.
This week, we have observed a fresh breakout in the stock on broader charts with additionally higher volumes which suggests the next up-move in the prices.
(The author is Senior Technical Analyst at SMC Global Securities)
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