Rohan Patil, Research Analyst at Bonanza Portfolio
The benchmark Nifty50 index witnessed a gap-up opening and traded above 17,080 for a major part of the day on December 1. It finally managed to close above 17,150. It has neither broken the previous day's high nor low. The India VIX managed to cool off by 8.13 percent to settle at 19.45.
The index managed to close above its 100-day exponential moving average. This is currently acting as an anchor point for the index. The Nifty closing above the lower side of the Bollinger band (20,2) is the first indication of reversal on the cards. At the same time, it has managed to stay above the 20-day EMA (exponential moving average) on an hourly basis.
The immediate support for the Nifty50 is placed near 16,800 and, if prices break below these levels, then 16,500 will be the next level to watch out for. The immediate resistance is capped at 17,355 levels. If the prices close above 17,355 convincingly, then the gate is open at 17,600 levels. The Nifty has just created an early indication of reversal. Any close above 17,355 will confirm that the reversal is in place.
Here are three buy calls for next 2-3 weeks:
Bajaj Holdings & Investment: Buy | LTP: Rs 5,186.45 | Stop Loss: Rs 4,880 | Target: Rs 5,600+ | Return: 8 percent
The prices were trading in a rectangle formation for the past two months and have formed a trend-line resistance at Rs 5,030 levels.
Bajaj Holdings has broken out of a rectangle pattern at Rs 5,100 levels on December 1 and the prices have registered a decisive breakout that suggests a change in the trend from sideways to upside.
The stock is trading above its 20, 50 and 100-day exponential moving averages on the daily time frame, which is positive for the prices in the near term.
The MACD indicator is reading above its centreline with a positive crossover above its signal line. Momentum oscillator RSI (14) is reading near 60 levels which indicates that the positive momentum will continue.
Union Bank of India: Buy | LTP: Rs 45.45 | Stop Loss: Rs 40 | Target: Rs 53 | Return: 16.6 percent
After a rectangle breakout, Union Bank of India has retested its trendline support and has completed its throwback of the bullish pattern on a weekly interval.
Prices hold firmly above their 100-week exponential moving average and the momentum oscillator RSI (14) is reading above 50 levels.
As the stock has corrected from the 54 levels and currently trading above its line of polarity, indicates a bottoming-out structure in the counter.
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