By Vidnyan Sawant, AVP - Technical Research at GEPL Capital
On the monthly chart, the Nifty50 has broken through the significant support level of 19,200, which had held for the past four months. This breach has led to the formation of a lower top, lower bottom pattern, signaling bearish sentiments for the medium term.
Shifting focus to the weekly timeframe, the index exhibited a notable bearish sign as it formed a large bearish candle and breached the previous swing low. This confirms the bearish structure of the index.
Zooming in further to the daily timeframe, the index has experienced a robust bearish trend in recent days, touching its 200-day exponential moving average (EMA) around 18,830.
Key support levels for the index include a sturdy foundation at 18,830, represented by the 200-day EMA, along with additional support zones at 18,640 and 18,460. On the other side, potential resistance levels may come into play around 19,350, followed by the 19,560 mark, and the 19,850 levels, which represent a swing high.
The relative strength index (RSI), a critical momentum indicator, consistently registers below the 50 level on both the daily and weekly charts, indicating a strengthening negative momentum.
Taking these factors into account, the perspective on the Nifty Index leans toward a bearish scenario.
Here are three buy calls for short term:
Medplus Health Services: Buy | LTP: Rs 813.10 | Stop-Loss: Rs 772 | Target: Rs 920 | Return: 13 percent
Medplus is currently exhibiting a change in polarity in its trend around the Rs 770 mark, pointing to a favorable price sentiment. In the latest week, the stock has broken out from the falling wedge pattern, signaling the commencement of an upward trend.
This bullish break is further highlighted by a notable surge in trading volumes.
Moreover, the RSI, consistently surpassing the 50 mark on both daily and weekly charts, accentuates the stock's increasing momentum.
Looking forward, we expect the prices to move higher till the mark of Rs 920 where the stop-loss must be Rs 772 strictly on the closing basis.
CreditAccess Grameen: Buy | LTP: Rs 1,542.50 | Stop-Loss: Rs 1,445 | Target: Rs 1,700 | Return: 10 percent
CreditAccess Grameen is currently trading at unprecedented highs, showcasing their resilience even amidst overall market downturns. The ratio chart against the Nifty index, CreditAccess Grameen distinctly displays an upward trajectory, underlining its notable outperformance.
The stock's bullish stance is further validated by its sustained position above the 12-day exponential moving average (EMA). An unfilled rising gap throughout the week further corroborates the ongoing uptrend.
Additionally, with the daily RSI consistently above the 50 mark, there's a clear indication of persistent positive momentum in the stock.
Looking forward, we expect the prices to move higher till Rs 1,700 where the stop-loss must be Rs 1,445 strictly on the closing basis.
Rainbow Childrens Medicare: Buy | LTP: Rs 1,133 | Stop-Loss: Rs 1,050 | Target: Rs 1,330 | Return: 17 percent
Rainbow Childrens has shown strong signs of positivity for the medium to long term. It has consistently formed a higher top, higher bottom pattern, maintaining levels near its all-time high for the past four months, indicating a robust uptrend. On the weekly charts, the stock experienced a minor correction, bottoming out at Rs 1,010, which suggests a bullish sentiment among investors.
A closer look at the daily charts reveals that Rainbow consistently remained above key moving averages, including the 50, 100, and 200-day simple moving averages. Notably, the stock formed a change in polarity (CIP) pattern near Rs 1,000 level, emphasizing the strength of the ongoing bullish trend.
The RSI, a crucial momentum indicator, consistently maintained a level above 65 across all time frames, be it daily, weekly, or monthly charts. This alignment confirms a resilient and sustained positive momentum.
Looking forward, we anticipate stock price to continue its upward trajectory, with a potential target of Rs 1,330. However, it's essential to practice prudent risk management, and we recommend setting a stop-loss at Rs 1,050 on a closing basis.
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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