The Nifty is consolidating between highs and lows made on the day of the Budget. On the upside, 17,900–18,000 is a critical resistance zone, and if Nifty manages to take out this area, then we can expect a rally towards 18,200 and 18,500 levels. On the downside, 17,600 is an immediate support while the 200-DMA (daily moving average) around 17,300 is a critical support level.
Bank Nifty is facing resistance at the 20-DMA, which is currently placed at 41,750; above this, we can expect a short-covering move towards 42,500. On the downside, 41,000 is an immediate support level, while 40,000 is a critical support level.
Option data is still indicating a rangebound move, while FIIs' short exposure in index futures is still above 80 percent. RBI's policy is a key domestic event, while FIIs' flow and the direction of global markets will be other important factors.
Here are three buy calls for next 2-3 weeks:
Action Construction Equipment: Buy | LTP: Rs 361.55 | Stop-Loss: Rs 337 | Target: Rs 404 | Return: 12 percent
The counter is coming out of 11 days of consolidation with heavy volume followed by a breakout of the Bullish Inverse Head & Shoulder formation. The overall structure of the counter is very classical on the daily chart. The pattern suggests an immediate target of Rs Rs 384, while it has the potential to move further upside till the Rs 404 level.
On the downside, a breakout level of Rs 350 will act as a strong base, whereas the 9-DMA will act as a strong support level. Most of the momentum indicators are positively poised.
Cera Sanitaryware: Buy | LTP: Rs 5,781 | Stop-Loss: Rs 5,550 | Target: Rs 6,244 | Return: 8 percent
A breakout of an Inverse Head and Shoulders pattern with strong formation has occurred on the counter. The counter has a classic structure because it is trading above all of its significant moving averages.
The momentum indicator RSI (relative strength index) is positively poised, whereas MACD (moving average convergence and divergence) is witnessing a centerline crossover on the upside.
On the higher side, the counter is witnessing the formation of a flag pattern as it is acting as an important psychological level at around Rs 5,800; above this, we can expect the level of Rs 6,200+ in the near-short term, while on the lower side, Rs 5,550 will act as a major support during any correction.
Gravita India: Buy | LTP: Rs 510 | Stop-Loss: Rs 460 | Target: Rs 564 | Return: 11 percent
The counter has seen a huge volume breakout of an ascending triangle formation, retests its previous breakout level of around Rs 470, and begins a new leg of rally. The overall structure of the counter is in a classical uptrend, as it is also trading above all important moving averages.
On the upside, the level of Rs 535 operates as vulnerable levels; above these, we can anticipate a protracted move towards Rs 560+ in the shorter to longer term. On the downside, Rs 460 acts as a crucial support during any pullback. Most of the momentum indicators are positively poised.
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