Although the Nifty on Wednesday rebounded from the lowest point of the day, the short-term outlook for the market remains feeble, given that the index ended the session below the vital short-term moving average of 21 days.
The relative strength index (RSI) shows a bearish crossover, further amplifying the pessimistic sentiment. The prevailing trend will continue to lack strength as long as it maintains levels below 19,521, where the 21-day exponential moving average (EMA) is placed. Looking downward, the initial support level is seen at 19,250.
The Bank Nifty index recently found support at a crucial level, the 100-day moving average (DMA), at 43,600. The index's potential to experience a pullback rally is contingent on maintaining this level above the 100DMA on a closing basis.
The immediate obstacle for the index is situated around 44,000. An upward breach beyond this level could validate a move towards 44,300 or 44,500 levels.
Here are three buy calls for short term:
Power Grid Corporation of India: Buy | LTP: Rs 248 | Stop-Loss: Rs 240 | Target: Rs 270 | Return: 9 percent
Power Grid is exhibiting an ascending pattern characterized by the formation of higher highs and higher lows. Additionally, the price is currently positioned above a significant moving average.
The daily RSI has undergone a bullish crossover. Looking at the upper range, there's a possibility of it advancing toward the range of Rs 265-270. On the downside, a support level is established at Rs 240.
NTPC: Buy | LTP: Rs 217.45 | Stop-Loss: Rs 210 | Target: Rs 230 | Return: 6 percent
Following a notable rally, the NTPC stock experienced a corrective phase and found support at its 20-day moving average (20DMA). The momentum indicator, RSI, signaling a positive crossover, affirms the strengthening momentum.
An essential support for the stock lies at Rs 210, anticipated to provide a buffer for the bulls. Meanwhile, the potential upside targets are marked at Rs 226-230.
KPIT Technologies: Buy | LTP: Rs 1,135.55 | Stop-Loss: Rs 1,100 | Target: Rs 1,220 | Return: 7.4 percent
The stock has demonstrated its ability to maintain a position above the crucial moving average, indicating an ongoing bullish trend. A favourable crossover in the weekly RSI implies a growing sense of positive momentum.
In the short term, there is potential for the stock to ascend toward higher levels. As a downside safeguard, support is established at Rs 1,100, while resistance is noted at Rs 1,220.
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