Vishal Wagh, Research Head at Bonanza Portfolio
Nifty opened gap up and closed positive in green amidst increased volatility and sideways market on November 23. On the daily chart, Nifty has made a bearish candle whereas on the hourly timeframe, Nifty was seen to be making higher highs and higher lows which indicates an indecisive market and it would be interesting to see how market behaves in the coming sessions.
The momentum oscillator RSI (relative strength index - 14) on the daily chart is at around 60; whereas the MACD (moving average convergence and divergence) is moving above the centre point from lower levels.
India VIX has increased from 13.84 to 14.04 levels below its 200 EMA (exponential moving average). Maximum pain of Nifty is at 18,300. Important support levels for Nifty are at around 18,200, 18,100 and 18,000 whereas the resistance levels are at 18,300, 18,400 and 18,550.
As per the F&O data, short covering has substantially increased in, out of the money (OTM) Calls, whereas long unwinding was seen in, out of the money (OTM) Puts which indicates a sideways market. 18,400 and 18,300 have high short built-up whereas 18,200 and 18,000 has high long built-up.
Here are two buy calls for next 2-3 weeks:
Gujarat Narmada Valley Fertilizers & Chemicals: Buy | LTP: Rs 623.65 | Stop-Loss: Rs 590 | Target: Rs 660 | Return: 6 percent
GNFC is expected to be retesting a breakout of a rounding bottom formation after five years on the weekly timeframe whereas on the daily timeframe the stock is likely to be taking support from a support zone and bouncing with high volumes which can be used as a confluence towards the bullish view.
The 200 EMA is at around Rs 430 on the weekly timeframe and the stock is likely to be comfortably trading above it.
The momentum oscillator RSI (14) is at around 46 showing strength by taking support at lower levels and the supertrend indicator is indicating continuation of the bullish trend.
Observation of the above factors indicates that a bullish move is possible in GNFC for targets upto Rs 660. One can initiate buy on dip in the range of Rs 620-623 with stop-loss below Rs 590 on daily closing basis.
Indoco Remedies: Buy | LTP: Rs 387.50 | Stop-Loss: Rs 372 | Target: Rs 400 | Return: 3 percent
Indoco Remedies is expected to be breaking out of a downwards sloping triangle pattern on the weekly timeframe after one-and-half-year and on the daily timeframe the stock is likely to be making a double bottom formation which can be used as a confluence towards the bullish view.
The 200 EMA is at Rs 321 on the weekly timeframe and the stock is comfortably sustaining above it which is a positive sign.
Momentum oscillator RSI (14) is at around 59 on the daily time frame indicating strength by sustaining above 50 and the supertrend indicator is also indicating bullishness.
Observation of the above factors indicates that a bullish move in Indoco is possible for targets upto Rs 400. One can initiate a buy trade in between the range of Rs 385-387 with stop-loss of 372 on daily closing basis.
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