On the monthly chart, the Nifty closed above the high of prior month for the first time after October 2021 which is a positive sign for the long term.
Nifty on the weekly timeframe is forming higher high, higher bottom pattern since past 6 weeks which shows the positive undertone in the prices for shorter to medium term.
On the daily timeframe, prices have formed Doji candle since last couple of days and an outside day candle pattern in the latest trading session, this indicates some profit booking has happened at the higher levels. Also RSI (relative strength index) plotted on the daily timeframe is showing bearish hinge at the overbought level indicating exhaustion in the positive momentum.
Going ahead, the immediate resistance for the Nifty is placed at the level of 17,500 followed by 17,800 (key resistance). On the other side, index has its immediate support at the level of 17,000, followed by 16,650.
As per the short term chart pattern, we feel the index may correct. So we advise to buy near support level with a strict stop-loss of 17,000 on the closing basis.
Here three buy calls for next 2-3 weeks:
Cipla: Buy | LTP: Rs 1,044.50 | Stop-Loss: Rs 977 | Target: Rs 1,250 | Return: 20 percent
By looking at the weekly charts of Cipla, we can spot that the stock moving in a uptrend while forming higher high, higher low formation. Prices in June 2022 showed a bounce on the upside after taking support from the rising trend line which is respected since July 2020.
Around the Level of Rs 877, prices have witnessed change in the polarity.
In the latest week on August 1, 2022 prices gave a breakout from the Double Bottom price pattern, it is a bullish reversal price pattern. The above pattern breakout was followed by high volume and a gap, this indicates that prices can continue the trend on the upside.
On the daily time frame, prices have sustained above upper Bollinger band, this tells that the volatility for the prices are rising for the upside.
RSI plotted on the daily timeframe as well as on the weekly timeframe are above 50 mark which reflects strong momentum in the prices.
Going ahead, prices can go higher till the level of Rs 1,250, we recommend to place stop-loss at the level of Rs 977, strictly on the closing basis.
Tata Elxsi: Buy | LTP: Rs 8,956.70 | Stop-Loss: Rs 8,030 | Target: Rs 10,500 | Return: 17 percent
On Weekly chart of Tata Elxsi, we can observe that the stock is in a strong uptrend and respecting the trend line since December 2020.
At the level around Rs 7,500, we can spot change in the polarity by the prices as well. Since March 2022, prices saw a pause in the form of Descending Triangle pattern.
In the prior week, we saw a breakout from the Descending Triangle, which indicates continuation in the trend.
Prices took support from the 13 weeks EMA (exponential moving average) and showed a bounce on the upside. The 13 weeks EMA has acted as a strong variable support for the prices.
By looking at the weekly chart, we witnessed a positive reversal by the RSI, which suggests that the stock has a strong momentum in its prices.
Going ahead we expect the prices to rise higher till the level of Rs 10,500, with a stop-loss of Rs 8,030 on the closing basis.
Alkyl Amines Chemicals: Buy | LTP: Rs 3,119.25 | Stop-Loss: Rs 2,931 | Target: Rs 3,850 | Return: 23 percent
On the weekly chart of Alkyl Amines, the prices have shown a bounce on the upside from 50 percent Fibonacci level of prior advance from Rs 436 (March 2020) to Rs 4,749 (July 2021).
In the prior week, prices gave a breakout from the Falling Wedge pattern which is a bullish reversal pattern. This indicates that prices may move higher in the direction of the breakout.
In the daily time frame, prices gave a breakout from rounding bottom pattern on August 1, 2022, which again is a bullish reversal pattern.
Prices have sustained 50-day EMA through which we can infer that prices are reversing on the upside.
RSI on the daily and weekly time frame have formed higher high, higher low formation which tells that prices have momentum in it.
Going ahead we expect the prices to go higher till the level of Rs 3,850. One can place a stop-loss at Rs 2,931, strictly on the closing basis.
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