(By Shitij Gandhi, Senior Research Analyst, SMC Global Securities Ltd. ) "Looking at futures open interest and other derivative data, we expect Nifty to consolidate in the range of 10,600 to 10,800 levels with a positive bias. Any dip in prices should be used as a buying opportunity as 10,550 to 10,600 spot levels should act as strong support,".
Benchmark indices tested its all-time highs and traded with positive bias in the recent trading sessions. However, the current technical setup and derivative data indicate towards sideways moves going forward as Nifty can consolidate in the range of 10,600 to 10,800 spot levels.
Since the inception of current series, put writers were seen active, but in Tuesday’s session once again call writers were seen getting active around resistance levels of 10,800, which indicates limited upside in the current expiry.
Put writers were seen active in 10,500 and 10600 strikes while call writers were recently seen active at 10,800 and 10,900 strikes. From derivative data 10500 put strike holds the maximum open interest with more than 75 lakh shares, which will act as a major support for Nifty.
However, looking at futures open interest and other derivative data, we expect Nifty to consolidate in the range of 10,600 to 10,800 levels with a positive bias. Any dip in prices should be used as a buying opportunity as 10,550 to 10,600 spot levels should act as strong support.
Here is a list of top 5 stocks which could give up to 17% return in the short term:
GATI Limited: BUY | Target: Rs167| Stop Loss: Rs 132 | Return: 15%
The stock has given a breakout above Rs 125 levels and also above its 200-days exponential moving average in the recent past on daily charts.
Since then it has been consolidating in the range of 125-145 and formed a rectangle formation on a daily interval. In Tuesday’s session once again fresh breakout has been witnessed above the pattern formation along with hefty volumes.
The rectangle formation is generally traded as continuation patterns of the previous trend. So, traders can accumulate the stock in a range of Rs 145-149 for the target of Rs 167 with a stop loss below Rs 132.
Trigyn Technologies Limited: BUY | Target: Rs 177| Stop Loss: Rs 138 | Return: 16%
After taking rally from 110 levels to Rs 145 levels stock has been seen trading in the range of Rs 130-145 from last five weeks. In this consolidation, the stock has formed bullish flag formation on daily interval and also manages to give break above the pattern formation this week.
Moreover, prices were seen rising along with hefty volumes which suggest strength in the current trend. So, traders can accumulate the stock in a range of Rs 152-155 for the upside target of Rs 177 with a stop loss below Rs 138.
Gujarat Alkalies and Chemicals Limited: BUY | Target: Rs 1036| Stop Loss: Rs 800| Return: 17%
The stock has been seen consolidating in range of 700-800 from last eight weeks and formed bullish flag formation on a weekly interval.
However, the fresh breakout has been witnessed in prices above the pattern formation this week along with consistent support from larger volumes. Moreover, prices are also maintaining well above its short & long term moving averages which will act as a key support to the prices.
So, traders can accumulate the stock in a range of Rs 885-892 for the target of Rs 1036 with a stop loss below Rs 800.
Shanthi Gears Limited: BUY | Target: Rs 182 | Stop Loss: Rs 149| Return: 13%
The stock has given fresh breakout above Rs 150 levels last month and tested Rs 175 levels in a short span of time. However, since then prices were seen consolidating in range of Rs 160-175.
On the weekly interval stock has formed symmetrical triangle formation and is on verge of a breakout above the pattern formation. The positive divergence in secondary oscillators like RSI and stochastic on daily interval suggest for next up move in prices moving forward.
So, traders can accumulate the stock in a range of Rs 161-165 for the target of Rs 182 with a stop loss below Rs 149.
Mahindra Holidays & Resorts India Limited: BUY | Target: Rs 420| Stop Loss: Rs 350| Return: 12%
The stock has been consistently trading lower in a downward sloping channel from last more than three months and slid below its 200-days exponential moving average on a daily interval.
However, last week sharp upside in prices has been seen as once again stock risen above its short and long-term moving averages.
Moreover stock has also given breakout above the falling trend line of the downward sloping channel. So, traders can accumulate the stock in a range of Rs 375-380 for the target of Rs 420 with a stop loss below Rs 350.