Bulls had a grand return as the benchmark index clocked a 2.5 percent rally on August 30 following a gap-down closing in the previous session. The rally took the index above the recent consolidation, sending the 50-day exponential moving average (EMA) above 200 daily moving average (DMA).
The relative strength index (RSI) is on the verge of a bullish crossover and is likely to enter the zone of 60, which will confirm the strength in the current momentum. The trend looks positive after the massive movement on August 30. Markets were closed on August 31 on account of Ganesh Chaturthi.
Over the short term, the index may move towards 18,000-18,100. On the lower end, support is visible at 17,500. The negative sentiment in the global market had minimal impact on the Indian markets, which clearly indicates strength.
On the weekly chart, the index has formed a bullish Engulfing candle, which is a bullish reversal pattern.
Here are two buy calls for the next two-three weeks:
Oberoi Realty: Buy | LTP: Rs 1,006.85 | Stop-Loss: Rs 960 | Target: Rs 1,040-1,080 | Return: 3-7 percent
The stock has given a strong breakout from the falling trend line with a surge in volumes on the daily chart. The F&O data, too, suggests fresh long built-up positions with a rise in open interest and price.
The RSI indicator has given a positive crossover on the daily chart and is trading above the level of 60, which confirms the strength in the breakout.
Ashok Leyland: Buy | LTP: Rs 154 | Stop-Loss: Rs 145 | Target: Rs 165-170 | Return: 7-10 percent
The stock was consolidating in a broad range between Rs 140 and Rs 155 for the past couple of months and saw some strong buying on a closing basis.
The stock witnessed strong volumes in the cash market and the F&O data witnessed long built-up positions as well.
The auto index has been the outperformer in recent times and now it has given a fresh breakout which confirms the strength in the stock.
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