The geopolitical concerns could continue to keep markets jittery but the technical set up and bounce look good for a higher move to cross the recent high of 10,325 levels.
Vikas Jain
Nifty filled its gap level near 9,550-9,600 and witnessed a strong pullback to close at an 8-day high with positive momentum across sectors and stocks.
The geopolitical concerns could continue to keep markets jittery but the technical set up and bounce looks good for a higher move to cross the recent high of 10,325 levels.
We remain positive till 9,725 level of Nifty is not breached on the downside as it coincides with the current week lows and the 20-day average.
Bank Nifty and NBFCs should witness a strong move from the current levels as it remained under pressure with respect to AGR ruling and interest moratorium ruling which is now postponed to the next hearing dates.
Nifty is up 6.3 percent, while mid-cap and small-cap indices are up 9.8 percent and 13.2 percent, respectively, from the last derivatives expiry till date.
Among individual sectors PSU Banks, Realty and Media gained 23.8 percent, 15.8 percent and 15.5 percent, respectively, while Pharma, IT and FMCG are underperformers, gaining 5.4 percent, 3.6 percent and 0.8 percent, respectively, from the last expiry to date.
With the derivatives expiry next week, we expect the market to trade volatile with rollover movement in individual sectors and stocks and the geo-political news flow could add more volatility.
On the higher side, 10,500 CE strike has the highest OI of 27.1 lakh shares while 9,900 PE strike remains strong support with OI of 32.8 lakh shares.
Here are three buy calls for the next 3-4 weeks.
The stock has crossed its short and medium-term averages with strong volumes and is expected to outperform from the current levels.
It has completed his 50 percent retracement at Rs 74 from the current year high of Rs 134 and higher bottoms on weekly charts are showing strength in the stock.
Weekly RSI has crossed from its average line, indicating a strong breakout and the sector is also in positive momentum.
The stock has formed a triple bottom in the range of Rs 380-385 on the weekly charts and the inside range on the daily charts should give a breakout.
Daily RSI is trading above 50 levels, indicating a bullish set up for the stock having an upper hand.
There are multiple support levels in the range of Rs 375-385 which offers a good risk-reward ratio from current levels.
The stock has retraced from its long-term averages after a correction from the highs of Rs 515 in the last one week.
The sector is in strong uptrend and higher bottom formation on weekly and monthly charts confirms a strong move in the coming months.
It also crossed its 34-month average with strong volumes, leading to a breakout from congestion after a long period.
(The author is Senior Research Analyst at Reliance Securities)
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