Nifty continued to trade lower for the third straight day of the week and got arrested near its 21-day exponential moving average for the second consecutive day on the daily timeframe.
Benchmark index on the weekly chart has formed a Bearish Evening Star candlestick pattern and has drifted below 17,500 levels with a loss of more than one and half percent. From the second week of October 21, momentum oscillator RSI (relative strength index - 14) is reading in a 'lower low lower high' formation on the weekly timeframe which indicates a lack of momentum in the current trend.
MACD (moving average convergence divergence) indicator has given an early reversal signal on the daily chart by crossing below its signal line on the daily scale. The higher high higher low formation on the Nifty will be neglected if prices close below 17,300 levels.
India VIX on the daily timeframe continued to settle below 21-DMA and has been placed below 20 levels in the last couple of days. A VIX index drifting lower is definitely a good sign for traders as there will be less volatility and a stable move.
After this week's close, on the lower end, support is visible at 17,300 - 17,150 whereas resistance is seen at 17,850-17,950.
Here are two buy calls for next 2-3 weeks:
Glenmark Pharma: Buy | LTP: Rs 477.80 | Stop-Loss: Rs 460 | Target: Rs 509 | Return: 6.50 percent
For the past one and a half month, prices have formed a basing formation and in terms of classic technical, the stock has formed a bullish Cup and Handle pattern on the daily interval.
On April 5, prices gave a decisive breakout above trend line resistance which is also a breakout of a Cup and Handle pattern at Rs 470.15 levels. The breakout was followed by an above average volume and prices successfully closed above 21-day exponential moving average (EMA) on the daily timeframe.
The majority of indicators and oscillators are also in bullish range shift mode and reading above line of polarity.
Ramco Cements: Buy | LTP: Rs 812 | Stop-Loss: Rs 775 | Target: Rs 877 | Return: 8 percent
After forming a bullish ABCD harmonic pattern on the daily chart, prices consolidated in a triangle pattern for more than a month and traded within a very narrow range.
On April 5, prices gave a decisive breakout above trend line resistance which is also a breakout of a triangle pattern at Rs 802 levels with above average volumes.
On the broader timeframe, prices have also given a breakout above five-week high and RSI (14) has shown a sharp bounceback from oversold levels with positive crossover.
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