By Rupak De, senior technical analyst at LKP Securities
The daily chart has formed a Bearish Engulfing pattern, indicating a potential reversal in the market. Despite this bearish signal, the overall trend remains positive as long as the price stays above the support level of 19,300. It is a level (19,300) where Put writers have maintained a heavy position, meaning that if the price drops below this level, it could indicate further downward movement.
Below 19,300, Nifty may fall towards 19,000-18,900. On the upside, there is resistance at 19,500, suggesting that the price may struggle to move beyond this level. A decisive move above 19,500 might lead the writers to unwind their positions.
The bears continued to dominate the market, as the index broke below the support level of 44,800. This suggests a bearish sentiment in the index. The next support level on the downside is located at 44,500 levels.
If the index dips towards this 44,500, it may present an opportunity for traders to initiate long positions, expecting a potential bounce from this support. On the upside, the immediate hurdle is at 45,000, where the highest open interest is observed on the Call side. This level may act as resistance to the index.
Here are three buy calls for short term:
NCC: Buy | LTP: Rs 135.75 | Stop-Loss: Rs 130 | Target: Rs 145 | Return: 7 percent
NCC has broken out of a consolidation pattern on the daily chart, indicating a potential upward move. The stock is currently holding above a critical moving average, showing strength.
The RSI (relative strength index) has formed a bullish crossover, suggesting increasing price momentum. Support is established at Rs 130, while resistance is visible at Rs 145.
NMDC: Buy | LTP: Rs 111.60 | Stop-Loss: Rs 107 | Target: Rs 120 | Return: 7.5 percent
NMDC has experienced a breakout from a Double Bottom pattern on the daily chart, indicating a potential bullish trend reversal. The price has surpassed the 50EMA (exponential moving average Rs 107.92), indicating strength, while the RSI shows positive divergence on the daily timeframe.
The RSI has formed a bullish crossover, suggesting increasing price momentum.
CG Power and Industrial Solutions: Buy | LTP: Rs 406 | Stop-Loss: Rs 384 | Target: Rs 425 | Return: 5 percent
CG Power has recently surpassed a swing high on the daily chart, indicating a potential reversal. The stock has managed to sustain above its near-term moving average, suggesting continued strength.
The RSI is in a bullish crossover, indicating positive momentum in the stock. There is a visible support level at Rs 384, which could potentially limit downside movements. On the upside, there is a resistance level at Rs 425.
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