The Nifty formed a near-term bottom around its 200-DMA (days moving average - 17,414) and then witnessed a decent bounce back. However, there are multiple hurdles at higher levels, where 17,800 is an immediate resistance while 18,000 is a key hurdle that needs to be crossed for any trend reversal.
On the downside, 17,600 is an immediate support level, while 17,500–17,450 is a critical support zone.
Bank Nifty was outperforming, but 41,650–42,000 is a critical supply zone; above this, we can expect a rally towards the 42,750–43,000 zone. On the downside, the 20-DMA around 41,000 is an immediate support level, while 40,444 is a critical support level.
We have seen a short covering move, and there is still scope for further short covering, but the market needs fresh longs with the support of institutional investors.
In the near term, global cues will be important because the market's focus is on the speech of the US Fed chairman.
Here are three buy calls for next 2-3 weeks:
Cummins India: Buy | LTP: 1,629 | Stop-Loss: Rs 1,550 | Target: Rs 1,754 | Return: 8 percent
The counter has given a breakout of the triangle formation on the daily chart. It has retested its previous breakout level of Rs 1,550 after hitting a fresh 52-week high. The structure of the counter looks classical as it is trading from all its important moving averages.
On the higher side, the stock is facing susceptible at around Rs 1,666; above this, we can expect a long rally till Rs 1,750+, while on the lower side, Rs 1,550 is the crucial support level in any correction.
HG Infra Engineering: Buy | LTP: Rs 764 | Stop-Loss: Rs 675 | Target: Rs 904 | Return: 18 percent
The counter has witnessed a breakout of long period of consolidation as it has retested its previous breakout level of Rs 650 after hitting a fresh 52-week high.
On the upside, Rs 815 is a susceptible area; above this, we can expect a run-up towards Rs 900+ levels in the near term.
On the downside, Rs 675 is major support during any correction.
MACD (moving average convergence divergence) is supporting the current strength, whereas the momentum indicator RSI (relative strength index) is also positively poised.
Power Mech Projects: Buy | LTP: Rs 2,388 | Stop-Loss: Rs 2,150 | Target: Rs 2,788 | Return: 16 percent
The counter is having a very classical uptrend, and it has witnessed a breakout of a triangle formation with strong volume on the daily chart. It is forming higher highs & higher lows formation on the shorter timeframe. The overall structure of the counter is lucrative, as it is trading above all of its important moving averages.
Most of the momentum indicators are positively poised and support the breakout move in this counter. On the upside, if Rs 2,410 is an immediate hurdle, we can expect a move towards the Rs 2,700+ levels. On the downside, Rs 2,150 will act as a strong demand zone.
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