The Nifty has been moving in the 15,431-14,350 range in the weekly frame for the past seven weeks. On the daily timeframe, it has closed below the 50-day simple moving average (SMA), which had been acting as strong support since October 2020.
Just like Nifty, the Bank Nifty also has moved and held below the 50-day SMA.
On the options front, huge participation and open interest addition are seen at the 15,000 Call strike. On the Put side, open interest addition is seen at 14,000.
Going ahead, we can expect the broader range of Nifty to be between 14,000 and 15,000.
On the indicator front, the RSI plotted on the weekly and the daily timeframes can be seen forming a bearish hinge and is moving lower, indicating that the bears are in control of the trend.
The key support levels to watch out for in the short-term are 14,350 (multiple touchpoint level) followed by 13,951 (38.2 percent retracement level of the rise from 11,557-15,431).
On the upside, the key resistance level is 15,000-15,050. If the index sustains above it, we might see the index head higher towards 15,220-15,430 (resistance zone and previous swing high).
Currently, the index seems to be moving lower in a corrective phase. If the index breaks below the 14,350, we may see it fall towards 14,000-13,951.
Here are three buy calls for the next three-four weeks:
Ambuja Cements | LTP: Rs 294.50 | Target price: 361 | Stop loss: Rs 290 | Upside: 23%
For the last couple of sessions, cement stocks have been gaining momentum and moving higher and Ambuja Cements has been one of the strongest outperformers in the segment.
On the weekly timeframe, the stock has been maintaining a higher high higher low pattern since March 2020.
For the last three sessions, the stock has been witnessing bullish momentum and moving higher.
On March 23, the stock broke above the previous swing high. This upmove was backed by volume, indicating participation in the up-move.
On the indicator front, MACD can be seen placed above the zero line, forming a bullish crossover, indicating the presence of bullishness in the prices.
The ADX is rising as the prices move higher, indicating strength in the upmove.
The immediate resistance is placed at Rs 332 (78.6 percent extension level of the rise from Rs 136.55-272 and projected from Rs 226), followed by Rs 361 (100 percent extension level of the rise from Rs 136.55-272 and projected from Rs 226).
The key support levels are Rs 290 (breakout level) and Rs 270 (previous swing low) level.
One can buy the stock at current levels for the target of Rs 332 followed by Rs 361.
Fortis Healthcare | LTP: Rs 199.50 | Target price: Rs 246 | Stop loss: Rs 175 | Upside: 23%
Fortis Healthcare, on the weekly timeframe, has been in a strong upmove since October 2020.
A simple bar chart analysis of the higher timeframe tells us that the stock is in a strong bullish phase.
On March 24, the stock tested a fresh 52-week high. The upmove of the past four sessions is backed by above-average volume, indicating participation in the up-move.
RSI plotted on the weekly timeframe can be seen moving higher, indicating the presence of bullish momentum in the prices.
The long-term moving averages on the daily timeframe are as follows: 50-day SMA (Rs 172), 100-day SMA (Rs 159), 200-day SMA (Rs 145).
Currently, the stock is trading above all the long-term moving averages.
Resistance is placed at Rs 230 (previous swing high), followed by Rs 246 (1.27 percent extension level of the rise from Rs 156 to Rs 206 and projected from Rs 183).
The key levels to watch out for on the downside are Rs 191 (weekly low), followed by Rs 175 (three-week low).
One can buy the stock at the current levels and add on dips till Rs 191 for the target of Rs 230, followed by Rs 246.
Godrej Industries | LTP: Rs 525.05 | Target price: Rs 655 | Stop loss: Rs 482 | Upside: 25%
Godrej Industries has been forming a higher high higher low pattern for the past two weeks after prices broke above the inverted head and shoulder pattern.
The breakout was backed by above-average volume. The stock tested a fresh 52-week high on March 24.
The MACD plotted on the daily timeframe is placed above the zero line and moving higher, indicating bullishness in the trend.
The ADX plotted on the weekly timeframe can be seen moving higher as the prices move higher.
The immediate resistance is placed at Rs 562 (previous swing high), followed by Rs 655 (August 2018 high).
The key support levels are Rs 504 (multiple touchpoint level and weekly low) and Rs 482 (December 2020 high).
One can buy the stock at the current levels and add on dips till Rs 504 with a target price of Rs 562, followed by Rs 655.
(The author is a technical analyst at GEPL Capital)
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