After a 6 percent correction from its all-time high of 20,222, the Nifty50 established a swing low at 18,837 and has since formed a structure of higher highs and higher lows.
Despite the subdued strength in the trend indicated by the MACD (moving average convergence divergence) trending on the higher side, the momentum remains positive with the RSI (relative strength index) sustaining above the 50 mark. This suggests a presence of upward momentum in the market.
Key levels to monitor include 19,850 on the upside, followed by 20,000 and 20,222, and on the downside, 19,700 followed by 19,650.
Sustaining above 19,850 could lead to further upside, particularly towards 20,000 and 20,222, driven by potential short-covering. The bullish strategy is recommended as long as the index protects the 19,700 level on the downside.
Here are three buy calls next 2-3 weeks:
Bharat Forge: Buy | LTP: Rs 1,094 | Stop-Loss: Rs 1,040 | Target: Rs 1,250 | Return: 14 percent
Between June 2021 and July 2023, Bharat Forge underwent a two-year period of time correction. However, post-July 2023, the stock emerged from a prolonged consolidation phase, signaling the initiation of a larger trend.
A recent development in the stock is the breakout of a Flag and Pole pattern, indicating a continuation of the existing uptrend.
Notably, the stock is presently trading above key moving averages, such as the 12-week exponential moving average (EMA), affirming the sustained upward momentum.
The weekly RSI charts reveal a bullish reversal, suggesting a prevailing positive momentum in the stock.
Looking forward, we expect the prices to move higher till the mark of Rs 1,250 where the stop-loss must be Rs 1,040 strictly on the closing basis.
Colgate Palmolive: Buy | LTP: Rs 2,187 | Stop-Loss: Rs 2,090 | Target: Rs 2,450 | Return: 12 percent
Colgate Palmolive is currently experiencing a robust uptrend, as it trades at record-high levels. Since July 2023, the stock has undergone a correction in both time and prices, demonstrating a graceful correction without the formation of lower highs and lower lows. This pattern signifies an overall positive sentiment in the market.
In the initial week of July 2023, the stock broke out of a rectangle pattern that had formed over three years, signaling the commencement of a larger trend.
Prices have consistently maintained levels above the 12-week EMA, affirming the presence of an enduring uptrend.
Looking forward, we expect the prices to move higher till the mark of Rs 2,450, where the stop-loss must be Rs 2,090 strictly on the closing basis.
MCX India: Buy | LTP: Rs 2,926 | Stop-Loss: Rs 2,750 | Target: Rs 3,335 | Return: 14 percent
The stock's current trend exhibits a promising pattern, characterized by a sequence of higher highs and higher lows following a breakout from the swing high of October 2021. This breakout was accompanied by significant trading volume, indicating heightened investor interest and anticipation.
Analyzing key indicators further supports the bullish outlook. The stock is currently trading above both the 50-day EMA and the 100-day EMA. Additionally, the RSI stands above the 60 mark, signifying strength in the ongoing trend. Furthermore, the MACD indicator is positive across higher timeframes, including monthly and weekly charts, reinforcing the overall robustness of the trend.
A noteworthy aspect is the ratio chart of the stock against Nifty, which is breaking out from a multi-year swing high connected to the 2016 swing. This breakout suggests that the stock is poised to continue outperforming the broader market in the foreseeable future.
Considering these technical indicators and chart patterns, the upside target for the stock is projected to be Rs 3,335 and view will negate below Rs 2,750. Overall, the combination of a strong trend pattern, positive indicator signals, and the breakout in the ratio chart against Nifty suggests a favourable outlook for the stock.
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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