By closing above the 26,600 mark, the Bank Nifty has given a bullish breakout on Monday from the downward sloping trend line, adjoining the high of May 31 and June 22. The next resistance is placed around 27,050 levels.

The Nifty gained 80 points on Monday to close at 10,853, its highest closing since June 13. It also managed to close above its crucial resistance level of 10,800, derived from the downward sloping trend line adjoining the all-time high of 11,171 (January 29) and the intermediate top of 10,929 (May 15), indicating a bullish trend reversal.

The index is comfortably trading above its 20, 50, 100 and 200-day daily moving average, which indicates that the trend is bullish for the short to medium term.

As far as supports are concerned, immediate support is seen at 10,700, followed by far one at 10,550.

The Nifty Midcap and SmallCap-100 indices rose a sharp 1.6 percent and 1.7 percent, respectively, on Monday. Though the positional set-up for the midcap and smallcap indices is still bearish, with lower tops and bottoms, both indices seem to have reached the oversold zone, which could trigger a relief or pullback rally in coming days.

In derivatives, we have seen long positions being built in the Nifty and Bank Nifty futures’ on Monday as well as last week. Foreign institutional investors’ (FIIs) also created fresh longs in the index and stock futures’ segment last week.

The Nifty open interest put-call ratio rose sharply to 1.54 levels from 1.51 levels on Monday. Rise in the Nifty OI PCR is largely on the back of put writing at 10,700-10,800 levels. Moreover, 10,700 is the level which consists of significant OI among Nifty July puts, indicating that 10,700 level should act as strong support for coming days.

On the higher side, the Nifty is likely to find an immediate resistance in the vicinity of 10,950-11,000 levels, where calls have been written. Any close above 11,000 levels would result in further short covering which might push it to 11,150-11,200 levels.

We advise investors to accumulate long positions in the Nifty with a stop loss of 10,700 and targets of 10,950 and 11,200.

Here is a list of top 3 stocks that could return 6-13% in next 1-2 months:

Exide Industries: Buy| CMP: Rs 268| Target: Rs. 285 | Stop-loss: Rs 258 | Return 6%

During the last week, Exide Industries had given a bullish trendline breakout on the daily chart by closing above the downward sloping trendline, adjoining the highs of 08-May-2018 and 31-May-2018.

In Monday’s session, stock price closed at an all-time high, crossing the previous resistance of 267.5 indicating bullish trend. The short-term moving averages are trading above long-term moving averages.

Oscillators and momentum indicators like RSI and MACD are also showing strength from the short to medium term perspective. Therefore, we recommend buying Exide Industries for the upside target of Rs 285 and keeping a stop loss placed below Rs 258.

Nucleus Software: Buy| CMP: Rs 387| Target: Rs. 420 | Stop-loss: Rs 370 | Return 9%

After forming multiple bottoms around Rs 350 odd levels during last month, stock price reversed northwards to close above its 5 and 20-DMA with higher volumes.

The stock price has also given a bullish breakout on the daily chart on Monday by closing above the crucial resistance of Rs 380 levels to close at one month high.

The momentum indictors and oscillators like RSI and MACD are showing strength in the stock for the short to medium term.

The midcap technology as a sector is looking good for the short-term on the charts. The short-term resistance is seen around the Rs420 level where the 200-day moving average is placed. Therefore, we recommend buying Nucleus for the upside target of Rs 420, keeping a stop loss placed at Rs 370.

Jai Corp: Buy| CMP: Rs 151| Target: Rs. 170 | Stop-loss: Rs 139 | Return 13%

The stock price is on the verge of giving bullish a downward sloping trendline breakout above Rs 152 odd levels on the daily charts.

The stock price is trading above its 5 and 20-day simple moving averages indicating short to medium term trend is bullish.

The trend of the last few days (where Price is rising with higher volumes and subdued volumes during the consolidation) indicates strength in the uptrend.

Therefore, we recommend buying Jai Corp for the upside target of Rs 170 and keep a stop loss below Rs 139.

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Disclaimer:- The views and investment tips expressed by investment experts are their own. Ripples Advisory advises users to check with certified experts before taking any investment decisions.