Nifty has completed a thousand-point journey in just 20 trading sessions.
On August 3, it closed above 16,000 for the first time, and on August 31, it closed above 17,000.
On September 1, it witnessed a gap-up opening following its prior trend and registered a lifetime high of 17,225.75.
After hitting its lifetime high, the index slipped and closed below 17,100.
The gap between its current value and the 21-day exponential moving average has extended rapidly. In the past, when such a technical setup was formed, we witnessed a sharp throw back towards the support zone.
Momentum oscillator RSI (14) is above 75 level which is an overbought zone for the oscillator.
All this indicates Nifty may witness some profit-booking or sideways consolidation in the next few trading sessions.
The immediate support for the index is placed at 16,750 near its continuation gap and the resistance is pegged near 17,250–17,300 levels.
Bank Nifty, on the daily chart, has given a breakout of a horizontal trendline which was placed near 36,300 level.
We are expecting an outperformance in the banking index as the majority of indicators and oscillators are indicating a breakout of the consolidation zone.
Support for the Bank Nifty is near 36,200–36,050 level and resistance is near 37,300.
Here are three buy calls for the next 3-4 weeks:
Britannia Industries | LTP: Rs 4,001 | Target price: Rs 4,300 | Stop loss: Rs 3,850 | Upside: 7%
Last week's price action of the stock has shown a breakout of a one-year-long consolidation pattern and tested its 52-week high.
The Nifty FMCG index has given a breakout of eight-week conjunction zone which indicates the FMCG index is likely to lead from the front.
On the daily chart, the stock has formed a W-pattern after forming a double bottom pattern around Rs 3,400, below its 200-day exponential moving average.
Mahindra & Mahindra Financial Services | LTP: Rs 161.95 | Target price: Rs 177 | Stop loss: Rs 154 | Upside: 9%
This stock has been trading in a lower high lower low formation on the daily as well as the weekly charts since February 15, 2021.
It has been forming a falling wedge pattern for the last six months and has witnessed a breakout of the pattern on August 30, 2021.
It has closed above its downward slanting trendline on the weekly timeframe.
Due to the recent smart rally, it has been able to close above its 21 and 50-day exponential moving averages on a daily scale.
Most indicators and oscillators have shown positive divergence with the higher high formation on the daily chart.
Torrent Power | LTP: Rs 485.55 | Target price: Rs 532 | Stop loss: Rs 463 | Upside: 10%
This stock has been trading in a rectangle formation for the last two months and has formed a trendline resistance at Rs 475.
This stock broke out of a rectangle pattern at Rs 488 on August 27 and registered a decisive breakout that suggests a change in the trend from sideways to upside.
It is trading above its 21, 50 & 100-day exponential moving averages on the daily timeframe, which is positive for the stock for the near term.
MACD is reading above its centerline with a positive crossover above its signal line. Momentum oscillator RSI (14) is above 60 level which indicates positive momentum may continue, going ahead.
(The author is a technical analyst at Bonanza Portfolio)Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.