The Nifty, which was consolidating for the first two trading session of the week, bounced back on Wednesday. The index closed at a record high on Wednesday.

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The current rally looks a bit tired at this juncture. However, no reversal has been formed on the chart, which indicates that consolidation is expected to continue in the near term.

The daily momentum indicator relative strength index (14) has made a bullish crossover. In addition, the daily moving average convergence divergence (MACD) is in bullish crossover and is currently staying above the signal line, which suggests the bullish momentum is likely to stay for the near term.

On the options front, put writing is visible at the maximum strike price of 11,000, followed by 11,200. Maximum open interest is visible in 11,500 call, followed by 11,400 strike.

Going forward, the market may remain rangebound. As the Nifty approaches 11,500, it will face resistance. On the other hand, supports are placed at 11,300-11,200 levels.

Here is a list of three stocks that could return 8-11 percent in 1 month:

Ajanta Pharma: Buy | CMP: Rs 1,187.75 | Target: Rs 1,295 | Stop loss: Rs 1,127 | Return: 9 percent

The stock has moved above its range bound pattern on the daily chart which shows growing optimism in the stock. The rise in the price was backed by better than average volumes.

In addition, positive crossover in the weekly RSI (14) suggests that positive momentum is likely to continue for the short-term. Traders can accumulate the stock in the range of Rs 1,185-1,195 for the target of Rs 1,295 and a stop loss below Rs 1,127.

Cholamandalam Investment: Buy | CMP: Rs 1,452.10 | Target: Rs 1,570 | Stop loss: Rs 1,398 | Return: 8 percent

On the daily chart, the stock has moved above the recent consolidation which indicates that the optimism has increased in the stock.

In addition, a rounding bottom kind of formation is visible on the daily chart. A positive divergence in the daily RSI (14) suggests waning bearishness.

Sterlite Technologies: BUY | CMP: Rs 360.20 | Target: Rs 400 | Stop loss: Rs 339 | Return: 11 percent

The stock has moved up above its previous “inflection point” on the daily chart. Moreover, the price has moved above 200-double exponential moving averages (DEMA).

The rise in price was backed by better than average volume. In addition, positive crossover in the weekly RSI (14) suggests a positive momentum for the short term.

Traders can accumulate the stock in the range of Rs 358-363 for the target of Rs 400 and a stop loss below Rs 339.

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Source: Moneycontrol.com