Hot stocks | As rally broadens focus on midcaps; 2 stocks that can give healthy returns in 3-4 weeks

Sameet Chavan

The market tends to remain lacklustre during the Christmas week. However, this year, the last two trading sessions saw major movements and turned out to be a treat for the traders before the New Year.

On the expiry day, December 26, benchmark indices corrected fiercely ending the December series below 12,200. The pessimism did not last too long as on the next trading session the market witnessed a gap up opening and ended nearly 1 percent higher.

The buying momentum augmented as the day progressed and eventually, the Nifty managed to snap a major portion of weekly losses.

In the last couple of weeks, the Nifty rallied nearly 500 points. Hence, at the end of the week ended December 20, the prices looked a bit exhausted.

It required some sort of correction either price-wise or time-wise. Due to the intra-week decline, the index is back to the equilibrium and is all set to enter an uncharted territory now.

We continue with our optimistic stance on the market and expect Nifty to head towards our recent targets of 12,400 - 12,500 soon.

On the downside, 12,150-12,100 has now become a sacrosanct support zone for the index.

The noteworthy characteristic of the December 27 rally was that it was broad-based and in favour of bulls.

We had a good broad-based rally in the market where few marquee large-cap names joined hands with quality mid-cap counters. It’s a sign of a healthy bull run, which we believe is likely to continue.

Also, the way the mid-cap index is shaped up now, all focus would now be on the broader end of the spectrum.

The Santa rally in the mid-cap space is likely to accelerate now. So, traders are advised to find such potential candidates which are either on the verge of a breakout or rebounding from their supports.

Here are two buy calls for the next three-four weeks:

PVR | Buy | LTP: Rs 1,883.60 | Target price range: Rs 1,930–1,950 | Stop loss: Rs 1,838 | Upside: 4 percent

This stock has created wealth for its shareholders over the past few years. We can observe a series of ‘higher highs higher lows’ in all time-frame charts.

The last couple of months had been a period of consolidation for this stock and on December 27, the prices finally managed to break out from the congestion zone. This move was accompanied by sizable volumes which suggest renewed buying interest after two months of boredom.

We expect the stock to continue its northward trajectory and enter uncharted territory soon.

Indoco Remedies | Buy | LTP: Rs 180.20 | Target price: Rs 211 | Stop loss: Rs 162 | Upside: 17 percent

After a long time, the mid-cap stocks have finally joined the bull’s party.

This mid-cap stock, after gyrating in a broad range of Rs 135-175 for the last five months, has finally broken the range on the higher side, confirming a ‘rectangular channel’ breakout.

In addition, prices on the daily chart have also closed above the 'super trend' indicator which acted as stiff resistance four times in the last few months.

Moreover, we are also witnessing a fresh bullish crossover with 50-EMA crossing 89-EMA from below, supporting the buy call.