Bears took control of the market on August 2 as the Nifty witnessed a consolidation breakdown on the daily chart. The breakdown was followed by a negative divergence formation in the daily RSI (relative strength index), reinforcing the strength of the weakness.
Besides, the Nifty has fallen below the critical near-term moving average of 21EMA (exponential moving average) for the first time since March 2023. Therefore, this correction may not end here, and rallies may be sold into. Furthermore, a decisive fall below 19,500 may trigger a correction towards 19,300.
The Bank Nifty index faced a bearish scenario, resulting in a breakdown from a rising trendline accompanied by increased trading volumes. The immediate resistance level for the index now seems to be at 45,200. If the index manages to cross this bar, it may potentially trigger some buying in the market.
On the downside, the index has the next support at 44,600-44,500 levels. If the index holds above this support zone, there is a possibility of witnessing some buying interest, leading the index towards the 45,000 levels.
Here is one buy call and two sell calls for next 2-3 weeks:
Berger Paints India: Buy | LTP: Rs 711.65 | Stop-Loss: Rs 680 | Targets: Rs 750-770 | Return: 8 percent
Berger Paints stock has witnessed a robust breakout on the weekly chart, accompanied by a sharp surge in trading volumes, indicating a significant shift in the stock's price direction.
The stock has surpassed its previous 5-week high, confirming its strength and suggesting potential upward momentum. Moreover, the momentum indicator, RSI, has given a positive crossover, further confirming a buy signal and implying increasing upward momentum in the stock.
For traders and investors, the stock has visible support at Rs 680, which might act as a crucial level for potential reversals. On the upside, the stock has potential price targets at Rs 750 and Rs 770, indicating the possibility of further price appreciation.
Bosch Futures: Sell | LTP: Rs 18,383.95 | Stop-Loss: Rs 18,900 | Targets: Rs 18,000-17,500 | Return: 4.8 percent
The stock has experienced a significant breakdown on the daily chart, accompanied by a notable increase in trading volumes, suggesting a potential shift in the stock's trend.
The momentum indicator, RSI, has breached the support level of 40, indicating the end of the bullish momentum and implying a weakening trend.
Currently, the stock faces strong resistance at Rs 18,800-19,000 zone, where selling pressure may be prevalent. On the downside, the stock has potential targets around Rs 17,500, suggesting the possibility of further downside movements.
IndusInd Bank Futures: Sell | LTP: Rs 1,386.35 | Stop-Loss: Rs 1,430 | Targets: Rs 1,360-1,320 | Return: 4.8 percent
IndusInd Bank's decline from a rising wedge pattern signals bearishness in the stock. Furthermore, the stock has dropped below the 21-EMA, reinforcing the negative sentiment.
The RSI also indicates weakness in the stock. On the downside, there is a possibility of the stock falling towards Rs 1,320. However, the stock faces resistance at Rs 1,430.
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