The market closed at the day's low, with the Nifty down 112 points to 18,287. The index saw rush to book profit from its 78.6 percent retracement level of 18,450 after a previous fall from 18,888 to 16,823. A bearish engulfing candlestick pattern formed on the daily chart, indicating possible profit-booking in the market.
The immediate support level is at the 9-DMA (day moving average) of 18,264, and if it falls below, the next demand zone is at 18,120–18,000. On the upside, if the Nifty breaches the 18,476 level, it could face resistance at 18,633–18,699.
For Bank Nifty, it has paused near its all-time high and showed some divergence in momentum indicators, suggesting a likelihood of profit booking. The immediate support level is at 43,500, while a major support base can be found at 43,000. Above 44,152 level, the next target levels to watch for are 44,444 and 45,000.
Here are three buy calls for next 2-3 weeks:
Mishra Dhatu Nigam: Buy | LTP: Rs 225.60 | Stop-Loss: Rs 205 | Target: Rs 254 | Return: 13 percent
The counter has experienced a breakout of a bullish Inverse Head and Shoulder pattern on the daily chart. This pattern is considered a bullish reversal pattern. The breakout from this pattern suggests a potential upward movement in the price. The breakout occurred with strong volume, which is often seen as a confirmation of the pattern's validity.
High volume during a breakout indicates increased market participation and interest in the stock, further supporting the bullish outlook.
Moving averages are widely followed technical indicators used to identify trends and potential support/resistance levels. Trading above the moving averages is considered a positive sign, as it suggests that the stock's price is in an uptrend and supported by buying pressure.
On the upside, Rs 230 is an immediate resistance area; above this, we can expect a run-up towards Rs 250+ levels in the near term. On the downside, Rs 205 is major support for any correction.
Sonata Software: Buy | LTP: Rs 954 | Stop-Loss: Rs 890 | Target: Rs 1,084 | Return: 14 percent
The counter is currently exhibiting a classical uptrend and is now breaking out of an ascending triangle formation to continue its upward trend. The ascending triangle is a bullish continuation pattern, and a breakout from this pattern typically suggests a resumption of the previous uptrend. The overall structure is very lucrative as it trades above its all-important moving averages.
On the upside, Rs 1,000 is an immediate resistance area; above this, we can expect a run-up towards Rs 1,080+ levels in the near term. On the downside, Rs 900 is major support for any correction.
The momentum indicator RSI (relative strength index) is also positively poised, whereas MACD (moving average convergence divergence) is supporting the current strength.
Elecon Engineering: Buy | LTP: Rs 534 | Stop-Loss: Rs 487 | Target: Rs 624 | Return: 17 percent
It is looking lucrative on technical fronts. Technically, it is bouncing back from a 38.2 percent retracement of the previous rally. It has witnessed a breakout of the triangle formation with strong volume, which suggests much more potential upside in this counter. It is trading above its all-important moving averages with higher highs and higher low formations.
The momentum indicator RSI (relative strength index) is also positively poised, whereas MACD (moving average convergence divergence) is supporting the current strength.
On the upside, Rs 550 will be an immediate hurdle, but Rs 600 looks like an imminent target in the near term. On the downside, Rs 487 is a strong support level.
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.
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