Hot Stocks | Graphite India, Kajaria Ceramics, Globus Spirits can give up to 17% return in short term

After a pause last Friday, Nifty resumed its upward journey on Monday where it gained 81 points to close at a new all-time high level of 15,752.

With intermediate and long-term momentum readings like the 14-week and 14-month RSI in rising mode and not showing any signs of negative divergence, we expect the uptrend to continue.

Also, plus DMI is placed above the minus DMI while the ADX is placed above 25 level with slopping upwards, indicating Nifty could continue its upward journey in the near term.

Nifty continues to form bullish higher top higher bottom formation on the weekly and monthly chart. The 14-month RSI is at 73 level and is not extremely overbought, which suggests scope for more upsides in the coming weeks.

In the Options segment, we have seen Put writing at 15,400-15,500 levels. During the recent correction, Nifty made a swing low of 15,460 while previous resistance of 15,432 will now interchange its role as a support.

Therefore, there are multiple pieces of evidence that suggest strong support in the range of 15,400-15,500 levels. We believe that the short-term trend will remain intact as long as Nifty is trading above the support level of 15,400.

A short-term trend reversal would be confirmed only if the Nifty closes below 15,400.

Immediate targets for the Nifty have seen around 16,000-16,100 levels, derived from the channel breakout on the weekly chart.

Nifty Midcap and Smallcap indices outperformed on Monday by gaining 1.2 percent and 1.5 percent, respectively. This calendar year so far, they have outperformed by rising by 29 percent and 36 percent, respectively, against a 13 percent rise in the Nifty.

We believe that there is still more upside left for mid and small-cap stocks.