Surpassing the key resistance level of 22,300, which was also the previous week’s high, the Nifty showed investor confidence and a bullish momentum. This upward trend resulted in a notable 0.75 percent gain on the Nifty 50 for the week, highlighting the strength of the bullish trend.
Any moderate market dip should be viewed as a buying opportunity. A close below the 22,000 level in the upcoming week could signal weakening bullish sentiment, potentially prompting a retest of the 21,800 support level.
The levels to watch out for in the current week would be 22,500 - 22,600 on the higher side, and 22,000 - 21,800 on the lower side.
Therefore, traders are advised to monitor key support and resistance levels closely and remain flexible in their trading strategies. Being prepared to adapt to changing market conditions is crucial for navigating shifts in sentiment and seizing opportunities while managing risks effectively.
Bank Nifty
Bank Nifty saw a substantial bounce of over 1,600 points after finding support at the 100-day exponential moving average (DEMA), coincidentally marking a 0.618 percent retracement of its previous upward movement. This rebound was notable, resulting in a weekly gain of 1.02 percent, indicating renewed buying interest at lower levels. This suggests that despite fluctuations, there remains underlying confidence and demand for banking stocks.
It is essential now to closely monitor the performance of Bank Nifty. The index must maintain support at the 46,500 level this week to sustain its bullish momentum. If it manages to hold above this level, there's potential for it to test 48,000 level, signaling further upward movement.
However, failure to maintain support at 46,500 could lead to additional selling pressure, potentially pushing Bank Nifty towards the next support level at 46,000.
Here are three buy calls for next 2-3 weeks:
Piramal Enterprises: Buy | LTP: Rs 935 | Stop-Loss: Rs 865 | Target: Rs 1,055 | Return: 13 percent
In September 2023, PEL reached its zenith, soaring to nearly Rs 1,140. However, it subsequently endured a substantial downturn of 26 percent. Presently, the stock seems to have discovered a level of support within the bracket of Rs 840-900, suggesting a potential stabilization in its price movement.
Notably, recent market observations have unveiled the formation of a double bottom pattern on the daily chart, accompanied by bullish divergence—a promising indication for traders. This confluence of technical signals presents an enticing opportunity for market participants.
In light of these developments, traders are advised to contemplate initiating long positions within the range of Rs 920-940. The anticipated target for this bullish trade is positioned at Rs 1,055, representing a potential upside opportunity. To manage risks effectively, it is recommended to set a stop-loss level at Rs 865, to be evaluated based on daily closing prices.
Following a peak close to Rs 1,926 level, Kotak Mahindra Bank underwent a substantial decline of around 10 percent in its value. However, in the past month, the bank has established a prolonged bottom around the 1.13 harmonic ratio. Interestingly, a bullish AB=CD pattern has also emerged near the aforementioned ratio, providing further bullish confirmation.
Additionally, on the indicator front, there is a bullish divergence observed on the daily stochastic (please refer to the chart), indicating a positive outlook for the stock. Consequently, one may consider buying in the range of Rs 1,705-1,730 with an upside target of Rs 1,820 and a stop-loss set at Rs 1,665.
IndusInd Bank: Buy | LTP: Rs 1,526 | Stop-Loss: Rs 1,475 | Target: Rs 1,600 | Return: 5 percent
After reaching a peak near the Rs 1,695 mark, IndusInd Bank experienced a significant downturn of approximately 15.75 percent in its price. However, over the last two months, IndusInd has formed a triple bottom structure between the 100 and 200-day exponential moving averages (DEMA), presenting an enticing opportunity at its current position.
Recent trading activity has seen IndusInd Bank breaking through the bear trendline while simultaneously showing bullish divergence on daily stochastics, indicating a favourable outlook for the stock.
Consequently, investors may consider initiating fresh long positions within the range of Rs 1,505-1,530, with an upside target of Rs 1,600. To manage risk, a stop-loss order could be placed near Rs 1,475 on a daily closing basis.
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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