On the higher side now 11,400 strike holds a maximum open interest in calls which should act as an immediate hurdle for Nifty.
Shitij Gandhi
After consolidating in the range of 11,100-11,350 in the last few sessions, Nifty continued its positive momentum on Tuesday as bulls took the charge, getting support from private banks, auto and cement stocks.
On the derivative front, call writers at 11,300 strikes triggered short-covering while put writers added hefty open interest at the same strike with nearly 33 lakh shares.
On the higher side now 11,400 strike holds a maximum open interest in calls which should act as an immediate hurdle for Nifty.
On the technical front, Bank Nifty is facing a strong hurdle in the zone of 22,300 to 22,500, above which follow-up buying can be seen in the index which will support the next up-move in Nifty also towards 11,500 levels in the coming sessions.
Here are three buy calls for the next 3-4 weeks:
Automotive Axles | Buy | LTP: Rs 683 | Target price: Rs 825 | Stop loss: Rs 580 | Upside: 21%
For the last two months, the stock has been consolidating in the range of Rs 510 to Rs 650 with prices holding well above the short and long-term moving averages on daily and weekly intervals.
At the current juncture, the stock has given a consolidation breakout with positive divergences on the secondary oscillators along with a rise in price and volume.
On daily charts, the stock has also managed to give breakout above its 200-days exponential moving average which suggests bullish momentum will continue in the upcoming sessions as well.
Traders can accumulate the stock on dips in the range of Rs 670-675.
KEI Industries | Buy | LTP: Rs 401 | Target price: Rs 452 | Stop loss: Rs 362 | Upside: 13%
The stock has been consistently maintaining its uptrend and can be seen trading in a rising channel on broader charts.
This week, the stock has given a fresh breakout above its 200 days exponential moving average on the daily interval, after a prolonged consolidation of nearly six weeks within a range of Rs 350 to Rs 390.
Additionally, the stock has also formed a rounding bottom pattern on the daily charts and given breakout above the same with marginally higher volumes which suggests more upside in the prices.
Traders can accumulate the stock in the range of Rs 395-400.
In the recent past, the stock gave a sharp breakout above Rs 180 and tested Rs 215 levels in a short span of time.
However, thereafter the consolidation in the prices kept the stock within the range of Rs 185 to Rs 220 levels for at least eight weeks.
Now this week, a fresh breakout has been witnessed in the prices after a prolonged consolidation with the stock closing above its 200 days exponential moving average on the daily charts.
On the derivatives front, we have witnessed some long build-up in the prices. Traders can accumulate the stock in the range of Rs 225-230 for the upside target of 250 levels.
(The author is Senior Technical Analyst at SMC Global Securities)
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