The benchmark Nifty has been showing a bullish trend with consistent higher tops and higher bottoms on monthly time frames. However, a recent Doji candle pattern at the life-high level suggests potential fatigue in the positive market sentiment. The corrective phase emerged in the last couple of weeks after reaching a fresh life high at 22,124 on the weekly chart.
Despite the correction, the Nifty made a 'higher top higher bottom' formation this week, indicating strong demand at lower levels. On the daily charts, the index is in a consolidation range between 21,350 and 21,850 levels, signaling a short-term sideways sentiment.
Critical technical indicators, especially the relative strength index (RSI), continued to show positive momentum, maintaining levels above 60 on weekly and monthly intervals. However, the RSI on the daily time frame hovers around the 55, indicating a neutral momentum in the short term.
Looking forward, immediate resistance levels for the Nifty are identified at 21,850, with an additional hurdle at 22,124, representing the life-high level. On the downside, crucial support levels lie at 21,350 and 21,100.
Considering the overall chart structure, there is an anticipation of short-term volatility. The recommendation is to consider buying at support near the 21,450–21,400 zone, targeting an upside potential ranging from 21,800 to 21,850 levels. It is advised to implement a strict stop-loss at 21,350 on a closing basis to effectively manage risks.
Here are three buy calls for 3-4 weeks:
Indian Overseas Bank: Buy | LTP: Rs 52 | Stop-Loss: Rs 46 | Target: Rs 62 | Return: 19%
IOB is presently trading at its 52-week highs, indicating a strong and resilient momentum in the market. The stock has demonstrated a robust structural development, forming higher tops and higher bottoms since its low point in March 2020. This consistent upward trajectory aligns with a classical uptrend, highlighting a robust price structure.
Furthermore, the stock maintains its position above both the 20-week and 50-week EMA (exponential moving average), reinforcing the bullish trend. The MACD (moving average convergence divergence) has provided a bullish crossover in the positive territory, underscoring the trend's strength backed by substantial momentum.
A noteworthy observation is the ratio chart of IOB against Nifty, which indicates a change of polarity. This shift showcases the stock's robust strength and potential for continuous outperformance compared to the broader market.
Looking forward, there is an anticipation of further price ascent towards Rs 62 mark. It is recommended to set a stop-loss at Rs 46, strictly based on the closing basis.
BSE: Buy | LTP: Rs 2,493 | Stop-Loss: Rs 1,980 | Target: Rs 2,973 | Return: 19 percent
BSE is currently trading within a clear rising structure, nearing its all-time highs, indicating robust momentum in the market. The stock has consistently formed higher highs and higher lows, initially breaking out from a falling wedge bullish pattern.
More recently, it witnessed another breakout from a triangular pattern, considered a shallow retracement of the prior rally. This breakout was supported by a significant surge in volume, surpassing the 10-week average, suggesting a continuation of the upward trend.
The stock's shallow retracement found support near the 20-week average, reflecting a mean reversion. The subsequent follow-up rally in the current week affirms the trend's continuation.
Additionally, the RSI has shown a positive signal, reverting upside from a trend line connected since 2021. This reinforces the bullish momentum, underlining a favorable outlook for BSE in the current market conditions.
Looking ahead, we anticipate further upward movement in prices, targeting Rs 2,973 level. It is recommended to set a stop-loss at Rs 1,980 based on closing values.
Container Corporation of India: Buy | LTP: Rs 921 | Stop-Loss: Rs 854 | Target: Rs 1,048 | Return: 14 percent
Container Corporation has initiated a bullish surge, backed by a series of technical validations. The stock consistently establishes higher tops and bottoms, signifying a sustained upward momentum. Notably, a significant structural development is evident with the swing high of November 2022 now acting as support, highlighting the stock's robustness.
The stock confidently trades above crucial moving averages, including the 12-week and 26-week EMA. This alignment with the moving averages not only reinforces the positive momentum but also instills confidence in the stock's continuous upward trajectory.
This bullish sentiment is further corroborated by indicators like ADX (average directional index) and DI (directional indicator). With the ADX at 36, a well-established trend is indicated, and the +DI consistently remaining above 25 underscores the strength of the positive momentum.
Looking ahead, we anticipate further upward movement in prices, targeting Rs 1,048 level. It is recommended to set a stop-loss at Rs 854 based on closing values.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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