On a monthly chart, the Nifty Index has been displaying a consistent rangebound movement, oscillating within a span of 1,000 points, specifically between 19,220 and 20,222, for the past four months. It has diligently maintained its bullish structure characterised by a pattern of higher tops and higher bottoms, indicative of a consolidation phase with a discernible positive bias in the overall performance.
Shifting our analytical focus to the weekly timeframe, the index has recently provided a strong signal by confirming the presence of a hammer candlestick pattern from the prior week. This pattern, coupled with the index's ability to sustain itself above its three-week high, signifies the emergence of initial positive signals following a corrective phase.
Zooming in on the shorter daily timeframe, the index has demonstrated resilience by consistently trading above its 20-day simple moving average (SMA) over the past few days. This, in conjunction with the maintenance of a higher top and higher bottom formation, fortifies the positive outlook for the short term.
Crucial support levels for the index include a robust floor at 19,480, marked by multiple touch points, followed by additional support zones at 19,200 and 19,000. Conversely, potential resistance levels may be encountered around the 20,000 mark, with further notable resistance markers at the all-time high of 20,222.
Additionally, the momentum indicator, relative strength index (RSI), has remained consistently above the 55 levels across all observed time frames, signifying that positive momentum is gaining strength.
Opportunely, a long position in the index near the support zone is advisable, with potential for an upward move towards 20,000 and 20,222 levels. It's important to note that our bullish stance would be invalidated should the Index fail to sustain above the 19,200 levels.
Here are three buy calls for next 2-3 weeks:
CDSL: Buy | LTP: Rs 1,391 | Stop-Loss: Rs 1,330 | Target: Rs 1,670 | Return: 20 percent
Currently, Central Depository Services (CDSL) exhibits a distinct uptrend, as evidenced by its pattern of higher highs and higher lows. A deeper dive into the daily charts reveals a breakout from the Bullish Pennant pattern, suggesting a continuation of the prevailing upward trend.
This breakout is further validated by a noticeable surge in trading volumes.
Additionally, the RSI on the daily charts also indicates a breakout, emphasizing the intensifying momentum in the trend.
Looking forward, we expect the prices to move higher till the mark of Rs 1,670, where the stop-loss must be Rs 1,330 strictly on the closing basis.
TVS Motor Company: Buy | LTP: Rs 1,598 | Stop-Loss: Rs 1,529 | Target: Rs 1,735 | Return: 9 percent
TVS Motor is currently trading at an all-time high, signaling a robust momentum in the stock. What was previously a resistance at Rs 1,545 has transformed into a strong support, further emphasizing the bullish sentiment in its ongoing trend.
The stock's upward momentum is further corroborated by its position above the 12-day exponential moving average (EMA), indicating a sustained bullish trajectory.
Additionally, the RSI unveils a bullish hidden divergence, highlighting the mounting momentum in the stock's price movement. Looking forward, we expect the prices to move higher till the mark of Rs 1,735 where the stop-loss must be Rs 1,529 strictly on the closing basis.
Ramco Cements: Buy | LTP: Rs 999 | Stop-Loss: Rs 935 | Target: Rs 1,130 | Return: 13 percent
Ramco Cements has demonstrated remarkable resilience in maintaining its 52-week high levels following the establishment of a Change in Polarity (CIP) pattern at Rs 830 levels on the monthly charts. This formation signifies a robust positive sentiment surrounding the stock for the medium to long term.
In the most recent week, the stock has exhibited a breakout from the Cup & Handle pattern, a development that has been evolving since January 2022. Notably, this breakout was accompanied by a notable increase in trading volume, underscoring substantial participation in the upward movement.
Analyzing the daily charts, the stock has firmly maintained its position above crucial moving averages, including the 50, 100, and 200-day simple moving averages (SMA). This consistency underscores the strength of the prevailing bullish trend.
Furthermore, the RSI, a key momentum indicator, has consistently hovered above the 60-mark across all time frames, be it daily, weekly, or monthly charts. This convergence confirms a robust and sustained positive momentum.
Looking forward, we anticipate the stock's price to continue its upward trajectory, potentially reaching Rs 1,130. It's important to note that a prudent risk management approach is essential, and we recommend setting a stop loss at Rs 935 on a 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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