Santosh Meena, Head of Research, Swastika Investmart
The Nifty took support at upsloping the trendline support after a vertical fall from 20-DMA (daily moving average) and witnessed a bullish hammer candlestick formation that may witness a pullback rally where 17,500 is an immediate hurdle while 17,600-17,800 is a critical resistance zone. On the downside, 17,000-16,800 is a critical support zone.
PCR (Put Call Ratio) below 0.7 and FIIs long exposure in index future below 32 percent is extremely oversold. As market is looking extremely oversold based on derivative data, we are due for a pullback.
Bank Nifty also took support at upsloping the trendline and witnessed a bullish Hammer candlestick formation where 20-DMA of 38,200 is an immediate hurdle. Above this, we can expect a short-covering rally towards 39,000-39,500 levels. On the downside, 37,000 is a key support level.
Here are three buy calls for next 2-3 weeks:
Brigade Enterprises: Buy | LTP: Rs 514.65 | Stop-Loss: Rs 470 | Target: Rs 590 | Return: 14.6 percent
The counter is in a strong uptrend where it has witnessed the breakout of the symmetrical triangle formation. It has relative strength where it took support at 20-DMA during the recent pullback and now it is ready for the next leg of the rally.
Once it will manage to close above Rs 540 level, we can expect a move towards Rs 590-625 levels while Rs 480-460 area has become a strong demand zone.
Momentum indicator RSI (relative strength index) is positively poised and witnessed a positive crossover, whereas MACD (moving average convergence divergence) is also trading above the centerline.
Can Fin Homes: Buy | LTP: Rs 629.15 | Stop-Loss: Rs 590 | Target: Rs 700 | Return: 11 percent
The counter has a strong bullish setup where it created a base at 200-DMA and then witnessed a breakout of a bullish inverse head and shoulder formation. It took support at 20-DMA during the recent pullback and formed a bullish Hammer candlestick formation.
On the downside, Rs 600 will act as a strong support level while the upside is open for Rs 700-750 levels.
JB Chemicals and Pharmaceuticals: Buy | LTP: Rs 1,759.45 | Stop-Loss: Rs 1,660 | Target: Rs 1,985 | Return: 13 percent
Similar to Can Fin homes, this counter also has a strong bullish setup where it created a base at 200-DMA and then witnessed a breakout of a bullish inverse head and shoulder formation.
It is respective its moving averages beautifully with positive bias in momentum indicators. On the upside, Rs 1,985 is an immediate hurdle; above this, we can expect fresh expansion.
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