The Nifty fell on June 19 after opening in the green, missing a previous life-time high by 7 points. At close, Nifty was down 70.6 points at 18,755.5. The index has been forming a bullish higher-top-higher-bottom candlestick pattern on the daily chart. Primary and intermediate trend of the index remains positive as it has been holding above 20, 50, 100 and 200-day EMA (exponential moving average).
Since momentum readings like the 14-week RSI (relative strength index) and 10-week MFI (money flow index) remain in the rising mode and are not in the overbought territory yet, we believe the uptrend is set to continue.
In the derivative side, we have seen aggressive Put writing at 18,500-18,600 levels, which coincides with previous swing low of 18,555 (June 9) on the daily chart. The 20-day EMA is placed at 18,580 levels. Therefore, on the downside, 18,500-18,600 could now be considered as an immediate support for the Nifty.
On the upside, all-time-high level of 18,887 could now act as an immediate resistance for Nifty. Above 18,887, Nifty could move towards next resistance of 19,000 and then at 19,200-19,300 in the coming weeks.
Traders are advised to hold longs with trailing stoploss of 18,500 in Nifty on the closing basis.
The upside momentum continued in the broader market indices like smallcaps and midcaps with the both the indices rising for the 12th consecutive week. Both the indices remain in a healthy uptrend in all the time frames. Though we do not rule out the possibility of a running correction after sharp rise in the last two-and-a-half months, we believe Midcap and small-cap stocks could continue their outperformance for the coming weeks.
Here are three buy calls for next 3-4 weeks:
VIP Industries: Buy | LTP: Rs 654 | Stop-Loss: Rs 610 | Target: Rs 700-725 | Return: 11 percent
The stock price has broken out from the symmetrical triangle on the daily chart. It has also broken out on the daily chart where it closes at highest level since February 27, 2023.
Momentum Oscillators - RSI (11) and MFI (10) is sloping upwards and placed above 60 on the daily chart, indicating strength in the current uptrend of the stock.
Bank of India: Buy | LTP: Rs 75 | Stop-Loss: Rs 71 | Target: Rs 80-84 | Return: 12 percent
The stock price has broken out on the daily chart with higher volumes to close at highest level since May 29, 2023. Short term trend of the stock turned positive as stock price closed above its 5 and 20-day EMA.
The stock price has been taking support around 200-day EMA since February 2023. RSI Oscillator (11) is sloping upwards and placed above 50 on the daily chart, indicating strength in the stock.
Surya Roshni: Buy | LTP: Rs 831 | Stop-Loss: Rs 780 | Target: Rs 895-940 | Return: 13 percent
The stock price has broken out on the daily chart on June 14, with sharp rise in volumes. Primary and intermediate trend turned positive as stock price is trading above all important moving averages.
Momentum Oscillators - RSI (11) and MFI (10) is sloping upwards and placed above 60 on the daily chart, indicating strength in the current uptrend of the stock.
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