In the current week, Nifty50 has made a low near the important support level of 16,800 and bounced back sharply which shows strong demand at lower levels. On the daily charts, Nifty formed Higher Top Higher Bottom and once again sustained above 200 days simple moving average (SMA - 17,185) indicating positive undertone of the market.
On the indicator front, the relative strength index (RSI) plotted on the daily charts is sustaining above 50-mark which shows positive momentum.
The Nifty has immediate resistance placed at 17,468 & 17,842 followed by 18,000 levels. The downside support for the index is placed at 17,185 (200 Day SMA) followed by 16,824 levels (weekly low).
The Nifty is in a sideways mode, we feel that the Nifty will move in range of 17,185–17,842 in the coming days. It has a strong support at 17,185. If it breaches 17,185 levels on the downside then it will move further down till 16,824 levels.
Here are three buy calls for next 2-3 weeks:
Reliance Industries: Buy | LTP: Rs 2,782.10 | Stop-Loss: Rs 2,550 | Target: Rs 3,346 | Return: 20 percent
Reliance is trading at fresh life-time high levels and giving a 6-month consolidation breakout on the weekly charts which has been forming since October 2021. We witnessed a volume pick up at every rise in a stock price which shows strong bullish undertone of the stock.
On the daily charts, every time the stock has taken a strong support with a minor whipsaw at 200 days SMA and bounce back indicating long term positive strength of the stock.
On the indicator front, the RSI plotted on the weekly time frame has sustained above the 60 mark with a higher top higher bottom pattern, indicating increasing bullish momentum in the prices.
Going ahead, we expect the prices to move at higher levels towards the Rs 3,123 post which we might see a move towards Rs 3,346 levels. We recommend a stop-loss of Rs 2,550 on daily closing basis.
Deepak Fertilizers: Buy | LTP: Rs 707.45 | Stop-Loss: Rs 655 | Target: Rs 943 | Return: 33 percent
Deepak Fertilizers and Petrochemicals Corporation is making a fresh life time highs since last 2 weeks which shows strong strength of the stock. On the weekly charts the stock has formed CIP (Change in Polarity) formation near Rs 500 levels and bounced back indicating bullish undertone of the stock for the medium to long term.
On the daily chart, the stock has given a successful breakout of Triangle pattern few days back with volume confirmation.
On the indicator front the RSI plotted on the weekly chart can be seen placed above the 65 mark and moving higher, indicating increasing bullish momentum in the prices.
Going ahead, we might see the prices move higher towards Rs 823 mark. If the prices manage to sustain above Rs 823 mark, we might see further up move towards Rs 943 level. We recommend a strict stop-loss of Rs 655 on daily closing basis.
Gujarat Alkalies and Chemicals: Buy | LTP: Rs 975.55 | Stop-Loss: Rs 855 | Target: Rs 1,235 | Return: 26 percent
Gujarat Alkalies has given a strong breakout of Saucer pattern which has been forming since January 2018 with volume. The stock has been sustaining above 20-week SMA with minor whipsaws since June 2020 which indicates strong positive sentiments of the stock for the medium to long term.
The RSI indicator plotted on the weekly charts is sustaining above 65 mark indicating positive momentum of the stock.
We expect the stock to move higher towards Rs 1,092. If it manages to cross above Rs 1,092 then eventually it will move towards Rs 1,235 levels.
One should maintain a strict stop-loss of Rs 855 on daily closing basis for this trade.
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