The past two days have brought bullishness in many counters and here are two stocks that can give good returns in the near term.
Tata Power, after making a high of 413, fell more than 10 percent. However, in the past two days, the stock has shown signs of reversal bouncing from the support level of 360.
On the technical charts, the stock has formed a Three outside Up candlestick pattern, going past the 50 percent of Monday’s fall.
The max pain for the stock stands at 370 showing a limited downside for the stock from here. The reversal also gives a very good risk-to-reward ratio.
Thus, Tata Power can be bought for a target price of 410 keeping the stop loss at 359 on a closing basis.
ICICI Lombard broke the major resistance of 1600 last week and since then, the stock has been holding firmly above this level. Remarkably, despite a sharp downturn in the market, the stock didn't experience much correction. The daily RSI, at 73, is also indicating momentum in the stock.
Option Chain analysis for the stock indicates a long build-up as future contract open interest has been increasing with the price. Additionally, the past few days have seen significantly higher writing of put options in comparison to call options.
Thus, it is recommended to buy ICICI Lombard for a target price of 1760 keeping the stop loss at 1580.
(You can now subscribe to our ETMarkets