The Nifty 50 index shows a strong and enduring bullish trend, characterised by a consistent formation of higher tops and higher bottoms across various time frames, including weekly and monthly charts. This pattern reflects a positive sentiment prevailing in the market for the medium to long term.
The index has shown an impressive seven consecutive weeks of positive closing, marked by green candlesticks. While the prior week saw a slight weakness, the overall structural integrity remained intact with the formation of higher highs and higher lows. This resilience allowed the index to regain the bullish momentum.
In the previous week, the index formed an indecisive candlestick, indicative of market uncertainty. However, the current week showed a decisive move as the index not only overcame the indecision but also achieved a new life high of 21,801.45. This successful breakout reaffirms the ongoing upward trajectory.
An interesting technical observation is the presence of a base rally pattern on the weekly scale. This pattern, characterised by a price action sequence of a rally, followed by a base formation, and then another rally, signals a strong and optimistic market outlook. It suggests that despite short-term fluctuations, the overall trend remains positive.
The index has now expanded its trading range, with an upper boundary around 21,800 to 22,000, while support is observed in the range of 21,700 to 21,600.
Here are three buy calls for next 2-3 weeks:
National Aluminium Company: Buy | LTP: Rs 128.60 | Stop-Loss: Rs 121 | Target: Rs 147 | Return: 14 percent
National Aluminium Company (NALCO) is riding high at its 52-week peak, maintaining a bullish trend since the low in September 2022, indicating positive momentum.
After nearly 14 months within a rising channel, the stock broke out last week with a surge in volume. The current week not only affirms this momentum but also sustains it with a follow-up closing, implying a structural development that signals a continued upward path for the stock.
The ADX (average directional index) study this week reveals a strong trend, with the ADX line surpassing the 28 mark. This suggests the initiation of a new trend, while the +DI (directional indicator) above 30 further emphasizes the stock's robust momentum for a sustained upward trajectory.
Adding to the positive outlook, the concept of mean reversion is evident. Dips towards the short-term 12-week EMA (exponential moving average) and 26-week EMA consistently act as crucial support levels, contributing to the stock's bullish stance.
Looking forward, there is an anticipation of further price ascent towards Rs 147 mark. It is recommended to set a stop-loss at Rs 121, strictly based on the closing basis.
Britannia Industries: Buy | LTP: Rs 5,282 | Stop-Loss: Rs 5,017 | Target: Rs 5,810 | Return: 10 percent
Britannia is currently trading at its all-time highs, reflecting a robust upward trend with consistent higher highs and higher lows.
After trading in a rising channel from April 2022, the stock underwent a healthy retracement, forming a robust base over a six-month period. The recent breakout from this base pattern has propelled the stock to new life highs, highlighting a strong chart structure and signaling potential for further upward movement.
Notably, during the retracement phase from the peak in July 2023, the stock found support at its 50-week EMA, emphasizing a resilient intermediate trend. With the stock holding above the 20-week EMA, the bullish momentum remains intact. The MACD (moving average convergence divergence) indicator has also recorded a positive crossover in the recent week within its positive territory, further confirming the stock's strong momentum.
Looking ahead, we anticipate further upward movement in prices, targeting Rs 5,810 level. It is recommended to set a stop-loss at Rs 5,017 based on closing values.
Aarti Industries: Buy | LTP: Rs 639.65 | Stop-Loss: Rs 600 | Target: Rs 736 | Return: 15 percent
Aarti Industries is currently positioned at its 52-week high, suggesting a significant positive trend with a rising price structure and strong underlying momentum.
The stock's recent breakout from a downward-sloping channel, which extended from the high in October 2021 to the low in July 2023, is a notable development. This breakout is supported by an increase in trading volume, indicating robust buying interest and a potential shift in the stock's trajectory.
Moreover, the ADX study, currently at 27, signifies a strengthening trend. The accompanying +DI (positive directional indicator) above 30 adds to the confirmation of a new uptrend. This suggests that AARTIIND is likely entering into a sustained bullish phase.
The stock is trading comfortably above key moving averages, such as the 12-week and 26-week EMA. This alignment with the moving averages reinforces the positive momentum and increases the confidence in the stock's upward trajectory.
Looking ahead, we anticipate further upward movement in prices, targeting Rs 736 levels. It is recommended to set a stop-loss at Rs 600 based on closing values.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
