Nifty continued its upward journey for the third day in a row and closed at new high of 17,946 on October 11. Intermediate uptrend remains bullish as Nifty has been making higher tops and higher bottoms over the last several months. Nifty has been trading above the rising 20 and 50-day EMA (exponential moving average), which gives further evidence of an uptrend.
The 14-month RSI (relative strength index) at 80 is not extremely overbought and is below its previous high of 2007 and 2014, which again suggests scope for more upside in the coming weeks and months. Intermediate upside targets for the Nifty are at 18,200 and 18,450.
In the Options segment, Put writing was seen at 17,600-17,700. During the last correction, Nifty found support around 17,600 level and bounced back. This level also coincides with the 20-day EMA which is currently placed at 17,630-odd levels. Therefore, we believe that short-term trend will remain intact till Nifty is trading above 17,600 levels.
Meanwhile, Bank Nifty has broken out on the daily chart by surpassing the previous resistance of 38,171. It is expected to move towards the next targets of 38,800 and 39,500 for the coming weeks.
Also, Nifty Midcap and Smallcap Indices closed at all-time high levels. During the October month till now, they have outperformed by rising 4 percent and 5 percent, respectively, as against 2 percent rise in the Nifty. Advances have outperformed the declines in six out of seven days of the October month. We believe that there is more upside left for Smallcap/Midcap stocks and they may continue their outperformance for the coming weeks and months.
To conclude, the short-term trend is expected to remain positive for both Nifty and Bank Nifty. Next upside target for Nifty is seen around 18,200, followed by 18,450. Longs should be protected with trailing stop loss of 17,600 in Nifty and 37,500 in the Bank Nifty.
Here are three buy calls for the next 2-3 weeks:
VIP Industries: Buy | LTP: Rs 544.40 | Stop Loss: Rs 500 | Target: Rs 625 | Return: 15 percent
The stock price has already broken out from the symmetric triangle on the weekly chart with higher volumes. Short-and medium-term trend of the stock is positive where it is trading above its all-important short-term moving averages.
Stock price is forming bullish higher top higher bottom formation on the daily and weekly chart. Daily RSI has shown trend line breakout, which is bullish development for short term.
Therefore, we recommend buying VIP Industries at CMP of Rs 544 for the target of 625, keeping a stop loss at Rs 500.
Rupa & Company: Buy | LTP: Rs 483.55 | Stop Loss: Rs 450 | Target: Rs 545 | Return: 13 percent
Stock price has broken out from the downward slopping trendline, adjoining the highs of 03-August and 17-September, 2021. Plus, DI (directional indicator) is placed above the Minus DI while ADX (average directional index) line has started sloping upwards, indicating stock is likely to gather momentum in the coming days.
Oscillators like RSI and MFI (Money Flow Index) is showing strength in the stock. Accumulation was seen during last few months where volumes were higher during the up days as compared to down days. Once this accumulation is over, we are expecting stock to witness sharp up move. Therefore, we recommend buying Rupa at CMP of Rs 483.55 for the target of 545, keeping a Stop Loss at Rs 450.
Glenmark Pharma: Buy | LTP: Rs 534 | Stop Loss: Rs 502 | Target: Rs 590 | Return: 10 percent
After forming multiple bottoms around Rs 490 odd levels, stock price reversed northwards to close above its 5 and 20-day EMA. Buying seen in the stock during last few days where stock price closed at highest level since September 16. Oscillators like RSI and MFI is placed above 60 and rising upwards indicating strength in the current uptrend.
Stock price has already corrected more than 25 percent from the recent high and as mentioned above technical Indicators are indicating that stock price is headed higher from here. Therefore, we recommend buying Glenmark Pharma at CMP of Rs 534 for the target of Rs 590, keeping a Stop Loss at Rs 502.
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