The Nifty is placed above all important moving averages, indicating a bullish trend in all time frames. The relative strength index (RSI) oscillator is not developing any negative divergence and rather has given the trend line breakout on the daily charts.
Trend breakout on the RSI oscillator could be a leading sign of a possible trend line breakout above 18,115 in the Nifty as well.
Despite the healthy fall of more than 500 points in the Nifty from the weekly highs, the market breadth has gone strong, as the advance-decline ratio has remained positive for most sessions in April.
By surpassing 61.8 percent Fibonacci retracement placed at 17,484, the Nifty has negated the entire down trend, which started from 18,604 and lasted till 15,671.
The previous resistance is expected to take on the role of support going forward. Support is seen in the 17,440-17,500 range, while resistance is at 18,115.
The Nifty could consolidate in the 17,440-18,115 range in the coming weeks, while stock and sector-specific bullish moves would continue to be there.
The index should be held with the stop-loss of 17,440. Any level above 18,115 would result in a fresh breakout on the medium chart, which could push the index beyond the all-time high of 18,604.
Here are three buy calls for the next two-three weeks:
HG Infra Engineering: Buy | LTP: Rs 627.9 | Stop-Loss: Rs 600 | Target: Rs 705 | Return: 12 percent
The stock has broken out from the downward sloping trend line on the daily chart. Price breakout is accompanied by a jump in volumes. The stock has surpassed the crucial resistance of the previous swing high of Rs 620.
Daily RSI has reached above the benchmark level of 50, indicating rising momentum. The daily moving average convergence divergence (MACD) indicator has reached above the equilibrium line. The stock is placed above all important moving averages, indicating a bullish trend on all time frames.
Kaveri Seed Company: Buy | LTP: Rs 607.20 | Stop-Loss: Rs 580 | Target: Rs 695 | Return: 14.5 percent
A downward sloping trend-line breakout was seen on the weekly charts. Price breakout is accompanied by jump in volumes. The stock has surpassed the previous top resistance of Rs 585 on the weekly chart.
The stock is now placed above all important moving average parameters. Indicators and oscillators like RSI, directional movement index (DMI) and MACD have been showing strength in the current up move. The stock has started forming higher tops and higher bottoms on the weekly chart.
Prince Pipes & Fittings: Buy | LTP: Rs 711 | Stop-Loss: Rs 671 | Target: Rs 810 | Return: 14 percent
A downward sloping trend-line breakout was seen on the daily charts. The price breakout is accompanied by a jump in volumes. The stock has surpassed the previous top resistance of Rs 698 on the daily chart.
The stock is now placed above all important moving average parameters. Indicators and oscillators like RSI, DMI and MACD have been showing strength in the current up move. The stock has started forming higher tops and higher bottoms on the weekly chart.
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