It was again a bull-favoured day for the benchmark index on December 30 where Nifty touched a new all-time high and managed to close in uncharted territory.
But the Doji candle formed on top is indicating the weakening of bulls' strength. So, till the time today's high does not get cut convincingly, the market may find the pressure at the current juncture.
Since a big candle down day of December 21, there has been a consistent rally in the market. The rally negated the bearishness of December 21.
Nifty is still holding well above the weekly pivot of 13,352, while also holding above the value zone of 13,666.
If we draw an upward rising trendline on the weekly chart connecting the low of 7,511 to its next connecting point of 10,790, one can find the next trendline support near 12,605 which is more than 1,250 points down from the current level.
Momentum oscillator RSI (14) continues to settle above its bullish range-shift zone and is currently reading well above 70 levels with positive crossover on the daily scale.
Meanwhile, the 21-day exponential moving average is placed near 13,529.
As Nifty is trading in uncharted territory, instead of finding tops and supply zone, one should continue adopting buy on every dips strategy.
Going forward, the trend in Nifty may remain bullish but the strength of bulls may be lesser compared to the previous few weeks.
At the higher end, the rally may extend towards 14,198. At the lower end, the support is placed at 13,660. The breach of 13,660 level will extend the fall to 13,530.
Here are two buy calls for the next 2-3 weeks:
Grasim has completed its correction seen between December 9 to December 21.
Now it is approaching the recent high and the breach of that level will open the gates for new levels.
The momentum oscillator RSI is above the 60 mark. The Fisher-Transform indicator has also given a bullish crossover.
Grasim has got back above the upward sloping 20-day EMA which is a very bullish indication for the stock for the coming few sessions.
The stock is ready to touch weekly resistance 3 (R3) and resistance 4 (R4) if it sustains above the recent high of Rs 954.
On the downside, major support is near the psychological levels of Rs 900. One should keep the stop loss just a few ticks below Rs 899 on a closing basis.
Eicher Motors has completed a rounding bottom and given the breakout from the formation.
The breakout zone at Rs 2,400 is successfully tested by it. Eicher is also outperforming the sectoral index Nifty Auto.
The momentum oscillator RSI (14) has started recovering post a hidden diversion near the recent bottom with a bullish crossover.
The Fisher-Transform indicator is also indicating the shift in momentum towards the bulls.
On the higher side, the first supply zone for Eicher is near the recent top of Rs 2,717 and support is just near the last three days' low of Rs 2,410.
(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.