Although it was a truncated for trades, the week ended March 7 saw an optimistic sentiment in the market, with hopes of reaching new highs in the benchmark indices. The Nifty index, though trading within a narrow range, managed to achieve a significant milestone by reaching the 22,500 mark. However, the downside was capped at 22,200 throughout the week.
From a technical perspective, there has been a bullish flag breakout observed on the daily scale of the Nifty index, indicating a potential target price of around 22,800. However, reaching the 22,500 level might introduce some softness in the market dynamics, as this represents the 100 percent extension of a previous move.
Looking ahead, 22,500 could act as an immediate resistance, with a close above this level possibly leading to further gains towards 22,800. On the downside, support is expected around the 22,200 to 22,000 range, with a major trend-changing support level identified at 21,500.
Despite the current bullish undertone, caution is advised due to the potential volatility associated with the leap year, as witnessed in the preceding months. Traders are therefore recommended to avoid aggressive bets in the market.
Shifting focus to the Nifty Bank index, it exhibited a slightly stronger performance compared to the benchmark index, recording a rise of approximately 1 percent and testing the 48,000 mark. However, the last week concluded with a closing below 48,000, encountering resistance from a gap area around this level. To sustain momentum and potentially reach new highs, the index needs to close above 48,000 in the current week. Conversely, the support is anticipated around the 47,000 level.
Here are three buy calls for 2-3 weeks:
ITC: Buy | LTP: Rs 413.55 | Stop-Loss: Rs 389 | Target: Rs 451 | Return: 9 percent
After reaching a peak near Rs 475 mark on January 4, 2024, ITC has experienced a significant decline of approximately 75 rupees, which represents a decline of approximately 16 percent. However, in the subsequent 18 trading sessions, ITC has shown stability by avoiding further declines and has instead consolidated within a range of Rs 400-416.
Notably, in the previous trading session, there was notable buying interest observed at lower levels, accompanied by substantial trading volume. From a technical standpoint, the formation of a bullish AB=CD pattern on the daily chart of ITC within the mentioned price zone of Rs 400-416. Interestingly, this zone also coincides with the 0.382 percent retracement level of a price swing that occurred between January 2023 and July 2023, as indicated on the chart.
Additionally, it has formed complex structure forming on the daily relative strength index (RSI) indicator, resembling a 'W shape' below the 30 level, which suggests a potentially lucrative buying opportunity.
Thus one can buy in the zone of Rs 405-415 with an upside target of Rs 451 and a stop-loss would be placed near Rs 389 on a daily close basis.
PVRINOX: Buy | LTP: Rs 1,415.5 | Stop-Loss: Rs 1,345 | Target: Rs 1,560 | Return: 10 percent
Since reaching its peak near Rs 1,830 level on December 18, 2023, PVRINOX has undergone a substantial decline of almost 483 rupees, representing approximately a 26 percent decrease. Over the past 18 trading sessions, PVRINOX has avoided further declines and has instead consolidated within Rs 1,350-1,415 range.
Notably, in the previous trading session, there was significant buying interest observed at lower levels, accompanied by substantial trading volume.
From a technical perspective, PVRINOX has formed a Bullish BAT pattern on the daily chart within the mentioned price range of Rs 1,350-1,415. Interestingly, this range also corresponds to a 0.382 percent retracement level of a price swing that occurred between May 18, 2020, and August 1, 2022, on a weekly scale.
Furthermore, on the indicator front, the daily RSI has formed a complex structure resembling a 'W shape' below the 30 level, indicating a promising buying opportunity. Therefore, it is suggested to consider buying within Rs 1,400-1,425 zone with an upside target of Rs 1,560. To manage downside risk, a stop-loss order should be placed near Rs 1,345 on a daily closing basis.
Kotak Mahindra Bank: Buy | LTP: Rs 1,748 | Stop-Loss: Rs 1,650 | Target: Rs 1,910 | Return: 9 percent
Following a peak close to Rs 1,850 level, Kotak Mahindra Bank underwent a substantial decline of nearly 187 rupees, marking a significant decrease of around 10 percent in its value. However, in the past month, Kotak Mahindra Bank has established a prolonged bottom around the 1.13 harmonic ratio.
Interestingly, a bullish AB=CD pattern has also emerged near the aforementioned ratio, providing further bullish confirmation. Additionally, on the indicator front, there is a bullish divergence observed on the daily stochastic (please refer to the chart), indicating a positive outlook for the stock.
Consequently, one may consider buying in the range of Rs 1,725-1,750 with an upside target of Rs 1,910 and a stop-loss set at Rs 1,650.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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