The Nifty has been managing to test lifetime highs since the previous week.
On the options open interest front, (June 10, 2021 expiry), the highest open interest is seen at 16,100 Call options.
On the Put side, the highest participation is seen at 15,500 and 15,400 contracts. Thus, we can expect the broader range of the index to be 16,100-15,400.
On the indicator front, MACD plotted on the daily timeframe can be seen above the zero line, moving higher.
The distance between the two moving averages can be seen increasing, indicating rising bullish momentum in the trend.
Going ahead, 15,660 (June 1 high) will act as a key resistance level. If the prices break above it, we may see the index move higher towards 15,725 (127 percent extension level of the rise from 14,151-15,044 projected from 14,151) beyond which the gates for 15,986 (100 percent extension level of the rise 13,596-15,431 projected from 14,151) open up.
On the downside, the 15,431 (previous swing) is the level to watch out for. If the index slips below it, we may it move lower towards 15,330 (March 12, 2021 high), followed by 15,140 (multiple touchpoint level).
Here are three buy calls for the next three-four weeks:
Adani Ports & SEZ | LTP: Rs 825.40 | Target price: Rs 927 | Stop loss: Rs 761 | Upside: 12%
For the past couple of weeks, this stock has been moving higher after bouncing off the Rs 690-mark.
On the indicator front, prices have been riding the upper Bollinger band for the past few months and have been placed above the 20-week SMA since October 2020.
The RSI, which was previously hovering around the 50-mark, can be seen rising since then, indicating the bulls have taken control of the trend.
The level of Rs 836 (38.2 percent extension level of the rise from Rs 500-885 projected from Rs 690) will act as a key resistance level.
If prices manage to break above this level, we may see them move higher and test Rs 882 (50 percent extension level of the rise from Rs 500-885 projected from Rs 690) and eventually towards Rs 927 (61.8 percent extension level of the rise from Rs 500-885 projected from Rs 690).
The key level to watch for on the downside is Rs 786 (breakout level). If the prices breach the level, we can assume them to move lower towards Rs 690 (previous swing low).
One can buy the stock at the current level with a target of Rs 882 followed by Rs 927 and a stop loss of Rs 761.
Aditya Birla Fashion and Retail | LTP: Rs 196.65 | Target price: Rs 237 | Stop loss: Rs 184 | Upside: 21%
For the past three weeks, the stock has been sustaining above the 20-week SMA.
On June 1, it moved above the multiple touchpoint resistance levels of Rs 195. The breakout was backed by above-average volume.
RSI plotted on the daily and the weekly charts can be seen placed above the 50-mark and moving higher, indicating the presence of bullish momentum in the trend.
Going ahead, Rs 222 (previous swing high) will act as a make-or-break level.
If the price sustains, we can see it move higher and test Rs 237 (multiple touchpoint level) and eventually towards Rs 250 (February 17, 2021).
The key level to watch out for on the downside is Rs 184 (20-week SMA), followed by Rs 163 (recent swing low).
Motherson Sumi Systems | LTP: Rs 250.50 | Target price: Rs 340 | Stop loss: Rs 247 | Upside: 36%
This stock has been forming a higher high, higher low pattern for the past couple of weeks.
On June 2, the stock gained bullish momentum and tested a fresh 52-week high of Rs 272.85. This up move was backed by above-average volume, indicating participation in the breakout.
The Stochastics plotted on the weekly timeframe can be seen moving higher, indicating increasing bullish momentum in the prices.
Going ahead, Rs 282 (100 percent extension level of the rise from Rs 143-238 projected from Rs 187) will act as a make or break level.
If prices stay above it, they can test Rs 307.70 (127 percent extension level of the rise from Rs 143-238 projected from Rs 187) followed by Rs 340 (161 percent extension level of the rise from Rs 143-238 projected from Rs 187).
The key level to watch for on the downside is Rs 247 (previous week high) followed by Rs 220 (multiple touchpoint level).
(The author is a technical analyst at GEPL Capital)Disclaimer: The views and investment tips expressed by 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.