The Nifty saw good upside during the last 5-6 trading sessions and post the budget session. After nearly 1,000 points rally from 16,840 to 17,800 level, the index is now facing resistance at the 20-day SMA (17,750) (simple moving average) which confluences with the 61.8 percent Fibonacci retracement of the previous fall (18,350-16,840).
From past 2 sessions, the index is facing resistance in the 17,750-17,800 zone. The downside support for the index is placed at 17,440 (50-day SMA) followed by 17,250 level.
Broadly, we expect the index to trade in a range of 17,000-17,800. For any further upside, it is important that the index breaks and sustains above 17,750-17,800 resistance zone.
Here are three buy calls for next 2-3 weeks:
Axis Bank: Buy | LTP: Rs 799.55 | Stop-Loss: Rs 760 | Target: Rs 936 | Return: 17 percent
Axis Bank has been forming a higher high higher low pattern after bouncing off the Rs 648 mark. In the week started January 24, 2022 the stock broke above the 20-Week SMA (Rs 734) post which the prices continued to move higher.
The RSI (relative strength index) plotted on the weekly time frame has moved above the 50 mark and is currently moving higher towards the overbought level, indicating increasing bullish momentum in the prices.
Going ahead, we expect the prices to move higher towards the previous swing high of Rs 870, after that we might see a move towards Rs 936.
We recommend a stop-loss of Rs 760 on daily closing basis.
Maruti Suzuki: Buy | LTP: Rs 8,593.65 | Stop-Loss: Rs 8,200 | Target: Rs 10,000 | Return: 16 percent
Maruti has been witnessing a rangebound move since January 2021 and has been moving between Rs 6,400-8,353. In the week started January 24m the prices not only breached but also managed to close above the Rs 8,350 mark. This was backed by good volume buildup indicating participation in the up move.
The RSI plotted on the weekly chart can be seen placed above the 50 nark and moving higher, indicating increasing bullish momentum in the prices.
Going ahead, we might see the prices move higher towards the Rs 9,600 mark. If the prices manage to breach above the Rs 9,600 mark we might see further up move towards the Rs 10,000 level.
We recommend a strict stop-loss of Rs 8,200 on daily closing basis.
Biocon: Buy | LTP: Rs 392.70 | Stop-Loss: Rs 370 | Target: Rs 460 | Return: 17 percent
Biocon has broken above the 6 months consolidation. Along with the breakout the stock has also breached above the 50-week SMA resistance and formed a strong bullish candle.
The RSI indicator plotted has also broken out of the range and is confirming the breakout.
We expect the stock to move higher towards Rs 430 and if managed to cross above Rs 430 then eventually towards Rs 460 level. One should maintain a strict stop-loss of Rs 370 on daily closing basis for this trade.
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