The Nifty has displayed a series of small body candles on its monthly charts over the past three months, signalling a potential slowdown in the longer-term uptrend. However, recent developments indicate a shift in momentum.
In the current week, the index formed a lower-top-lower-bottom pattern along with a Doji pattern, but it managed to find strong support in the 21,800 – 21,750 range, indicating robust demand at lower levels. Moreover, the 13-week exponential moving average (EMA) has consistently acted as a support zone since November 2023, reinforcing the potential for an upward movement.
A significant development is the Change in Polarity (CIP) formation observed at the 21,800 level on the daily scale, aligning with higher time frames. Key technical indicators, particularly the relative strength index (RSI), show positive readings above 60 on weekly and monthly intervals, while hovering around 50 and trending upwards on the daily scale, suggesting a favourable momentum.
Looking ahead, immediate resistance levels are identified at 22,200, which holds pivotal importance on higher time frames, followed by resistance at 22,530. Crucial support levels are noted at 21,800 and 21,500.
Based on the current chart patterns, a robust, bullish phase is anticipated for the longer term. It is advisable to consider buying opportunities above the 22,200 level, targeting potential upside levels ranging from 22,530 to 22,900. To effectively manage risks, it is prudent to implement a strict stop-loss strategy at 21,800 on a closing basis.
Here are three buy calls for the next 2-3 weeks:
Cummins India: Buy | LTP: Rs 2,898 | Stop-Loss: Rs 2,672 | Target: Rs 3,340 | Return: 15 percent
Despite broader market weakness, Cummins India is currently trading at its all-time high, displaying robust momentum by breaking a four-week range. Analysis on a weekly scale reveals a significant rally since November 2023, indicating a consistent upward trajectory.
The stock has maintained its position above key averages such as the 12-weekly and 26-weekly averages, signalling a positive trend. Additionally, the MACD (moving average convergence divergence) study shows rising values in the positive territory, further reinforcing the bullish momentum.
On the ratio chart against Nifty, a breakout from the 2015 swing pattern was observed in the recent week, suggesting strong outperformance.
Looking forward, there is an anticipation of further price ascent towards Rs 3,340 mark. It is recommended to set a stop-loss at Rs 2,672, strictly based on the closing basis.
Sapphire Foods India: Buy | LTP: Rs 1,583 | Stop-Loss: Rs 1,457 | Target: Rs 1,900 | Return: 20 percent
Sapphire Foods is showing notable relative strength, reaching new heights while the index tests key supports. The positive momentum is supported by robust volumes.
This week, the stock broke through a crucial resistance zone that had previously seen multiple rejections, indicating a strong upward trajectory with significant volume participation.
Sapphire maintains its position above key averages such as the 12-week and 26-week EMAs. The RSI study consistently remains above 60 across various timeframes, further reinforcing the breakout fuelled by a bullish momentum.
Additionally, on the ratio chart comparing Sapphire against Nifty, a breakout from a sloping trend line suggests the beginning of an outperformance journey.
Going ahead, we expect the prices to go higher till the level of Rs 1,900, the bullish view will be negated if we see prices sustaining below Rs 1,457 level.
BSE: Buy | LTP: Rs 2,243 | Stop-Loss: Rs 2,064 | Target: Rs 2,703 | Return: 20 percent
BSE demonstrates a robust price structure, characterized by a clear uptrend since March 2023, marked by consistent higher highs and higher lows.
Following a healthy retracement from December 2023 after a sharp up move, the stock has now found support on the 30-week exponential moving average, indicating a mean reversion scenario.
On the daily scale, BSE exhibited a breakaway gap, signaling the initial indication of an end to weak sentiment. Notably, the momentum indicator RSI displayed a polarity shift, as marked on the chart, indicating a shift in momentum that could lead to an upward trajectory.
Looking forward, there is an anticipation of further price ascent towards Rs 2,703 mark. It is recommended to set a stop-loss at Rs 2,064, strictly based on the closing basis.
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