On December 3, Nifty traded flat near all-time high but the broader markets continued their positive momentum with a sharp up-move in midcaps and smallcaps.
Nifty midcap and smallcap indices closed near 2-year highs and may continue to outperform the broader markets.
The advance-decline in the derivatives segment remained strong with 125 shares advancing and 14 declining for the current expiry month-till-date.
There could be some bouts of volatility due to the RBI monetary policy announcements.
Bank Nifty is facing resistance near 30,200-30,500 levels and we expect some time-wise correction after a sharp up-move in the last 2 months.
Among sectors, we expect Nifty FMCG and Pharma index to outperform from the current levels as they have crossed the short-term averages.
Risk-reward is in favour of longs and we expect scaling a new all-time high.
Here are three buy calls for the next 2-3 weeks:
BPCL | LTP: Rs 393.35 | Target price: Rs 445 | Stop loss: Rs 368 | Upside: 13%
The stock has made higher bottoms on the weekly charts and witnessed positive momentum crossing its 50-day average.
Trend reversal and RSI turning upwards from the bottom could witness a sharp up-move to test the recent highs.
As per the current set up, we believe the stock and sector will remain in focus for the next couple of weeks.
Hindustan Unilever | LTP: Rs 2,130 | Target price: Rs 2,380 | Stop loss: Rs 1,985 | Upside: 12%
The stock is trading sideways near its band of short and long-term averages and we expect the stock to give an upward breakout.
We believe it has completed its price and time-wise correction and now expect it to outperform over the next few weeks.
Torrent Power | LTP: Rs 324.80 | Target price: Rs 360 | Stop loss: Rs 300 | Upside: 11%
The stock has witnessed a sharp breakout with strong volumes after trading in a narrow range over the past two months.
Key technical indicator RSI is trading above its average line and has also reversed turning upwards, looking poised for a breakout from the current levels.
There are multiple support levels in the range of Rs 305-315 which offers a good risk-reward ratio from the current levels.
(The author is Senior Research Analyst at Reliance Securities)