Here's why IGL, M&M Financial and Tata Consumer are short-term bets

The second-quarter result season and rollover movement will increase volatility in individual sectors and stocks.

Nifty has failed 3 times in the last 10 trading sessions to cross the resistance of 12,050, witnessing correction from higher levels.

The sector rotations continue to gain strength in the narrow range with IT, Pharma and Auto witnessing profit-booking while Banking, Real Estate and Metals have gained strength.

Select mid-caps and small-caps have started to outperform after the quarterly results, keeping the broader markets in positive momentum.

Nifty is up by 10 percent from the last expiry while Bank Nifty is up by 20 percent with clear outperformance in the private banking sector and financial services.

A clear breakout above 12,050 will give a sharp up-move as we are in the derivatives expiry week.

The second-quarter result season and rollover movement will increase volatility in individual sectors and stocks.

India VIX is on the verge of a breakout above 24 levels which will spike volatility.

On the higher side, 12,000 CE strike has the highest OI of 30.9 lakh shares while 11,700 PE strike has the OI of 28.9 lakh shares.

The trend reversal is placed at 11,700 with respect to the recent lows over the last 2 weeks and OI at 11,700 puts will also start unwinding.

Here are three buy calls for the next 3-4 weeks:

Indraprastha Gas (IGL) | LTP: Rs 390.05 | Target price: Rs 455 | Stop loss: Rs 375 | Upside: 17%=

The stock has bounced from its 100-week average at Rs 365 and witnessed a sharp pullback with strong volumes.

Its Relative Strength Index has crossed upwards from its lower band of averages and we expect the stock to outperform.

The stock has completed its price and time-wise consolidation after a sharp down-move from the highs of Rs 534.

Mahindra & Mahindra Financial Services | LTP: Rs 132.80 | Target price: Rs 152 | Stop loss: Rs 119 | Upside: 14.5%

The stock has witnessed a good correction after its rights issue, retracing 38 percent of the previous move from Rs 75 to Rs 150.

Crossover of its short and medium-term averages on daily charts with strong volumes reinforces our positive stance.

The sector is in positive momentum and RSI trading upwards from its average line gives confirmation of a strong move.

Tata Consumer Products | LTP: Rs 466.95 | Target price: Rs 535 | Stop loss: Rs 445 | Upside: 15%

The stock has declined by 20 percent from its recent high and witnessed support near its 100-day average.

We believe the stock has completed its 8-week fall and closed in a positive Doji on the weekly charts, confirming a trend- reversal.

We expect the stock to bounce back over the next few weeks as RSI has also turned positive on daily charts.

(The author is a senior research analyst at Reliance Securities)

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