Three Stocks Poised for a Potential 24% Upside as Futures and Options Expiry Week Commences Tomorrow
Future and Option stocks :The benchmark Indian indices finally ended their seven-week winning streak as investors tried to take some money off the table ahead of the holiday season. The Nifty suffered heavy profit-booking in the week ended December 22 mainly because of short-term overbought conditions along with renewed Covid concerns. The index initially registered a high of 21,593 and then went into a selloff that forced it to sneak below 21,000. However, the bulls managed to recoup some of the losses and helped the index to close near 21,350 with a marginal loss of 0.50 percent.
On the daily chart of Nifty spot, we see a bearish candlestick formation and that is a concern. Also, after making a low of 20,976, the index recovered sharply but failed to clear the hurdle near 21,400, which is the 61.8 percent retracement of the recent fall. Till the time 21,400 is not taken out on a closing basis, the pullback can be considered a part of the downturn. A move above this might kick off yet another round of rally that can lead the index towards 21,800.
On the other hand, one should keep a note of FII’s long-short ratio in index futures around 66 percent till December 21. Once this ratio crosses the 70 percent mark, markets might start preparing for a temporary short-term top formation. On the downside, a move below 20,976 might shake the confidence of bulls and that can lead to further profit-booking. Thus, the current week being a monthly expiry week starting on December 26 can be a trend-setter for January 2024.
Once again the Nifty Bank index was the culprit since it underperformed the benchmarks by a decent margin. The index lost around 1.5 percent during the week and closed near 47,500. In the coming week, 48,200–47,000 seems to be a trend-deciding range for the index. A breakout or a breakdown from the given range might dictate further course of action for the index.
Presenting three recommended buy calls for the upcoming 2-3 weeks:
Consider Purchasing Crompton Greaves Consumer Electricals at the Current Market Price of Rs 301.8, Setting a Stop-Loss at Rs 275, with a Target of Rs 350 for a Potential Return of 16 Percent over the Next 2-3 Weeks.
In the past week or so, there has been a notable increase in momentum for this stock. Analyzing its retracement, we observe that alternate wave retracement aligns closely with 0.618 and 1.628 of its preceding upward movement, making it an attractive option for purchase. Additionally, both time and price retracement are indicating a potential bottoming out, with time retracement at 100 percent and price retracement at 0.618 percent.
On the indicator front, the weekly Relative Strength Index (RSI) has undergone a reversal from the 50 levels, adding further support to our optimistic view on this stock.
Considering these factors, it seems opportune to buy in the price range of Rs 295–305, with a target set at Rs 350 and a suggested stop-loss at Rs 275, based on daily closing prices.
Consider Buying Clean Science and Technology at the Current Market Price of Rs 1,517, with a Stop-Loss set at Rs 1,425 and a Target of Rs 1,650 for a Potential Return of 9 Percent.
Clean Science and Technology has been in a consolidation phase, fluctuating between Rs 1,330 and Rs 1,430. Recently, it successfully broke out from this range and has maintained its position above these levels. Additionally, the bear trendline on a weekly scale has been breached, and both the RSI (Relative Strength Index) and DMI (Directional Movement Index) weekly indicators are in a bullish mode, presenting an appealing opportunity.
Therefore, we recommend traders to consider taking a long position in the range of Rs 1,480-1,520. To manage risk, set a stop-loss at Rs 1,425, and anticipate an upside target of Rs 1,650.
Consider Purchasing Yes Bank at the Current Market Price of Rs 21, Setting a Stop-Loss at Rs 19, with a Target of Rs 26 for a Potential Return of 24 Percent.
Since the last month, Yes Bank has gained some quick momentum and placed near the Rs 21 mark. Recently, it took out its previous swing high with huge volume and successfully sustained above it. The most important part is that the 5-year bear trendline has been violated, which confirms our bullish stance in the YES Bank.
On the indicator front, daily DMI and RSI (relative strength index) are hinting at a bullish bias in the counter. Thus, one can buy in the range of Rs 21–22 for a target of Rs 26 and a stop-loss of Rs 19 on a daily closing basis.
Important Note: The opinions and investment suggestions provided by financial experts on Moneycontrol.com are personal to them and do not represent the views of the website or its management. Moneycontrol.com strongly recommends users consult certified experts before making any investment decisions.
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