Santosh Meena, Head of Research, Swastika Investmart
It was not just a relief rally on February 15, but a strong comeback by the bulls as they managed to defend the 200-DMA (day moving average). Nifty, BankNifty, Reliance Industries, and many stocks respected their 200-DMA in Tuesday's trading session and witnessed a strong reversal. The reason for the rally was easing tension between Russia and Ukraine while the market was oversold.
We are in a range since October and the good part is that there is no breakdown despite relentless selling by FIIs, whereas we have come down to the lower end of the range in recent fall, therefore, a strong pullback was expected.
On the upside, 17,450 is an immediate and important resistance level which is a cluster of 50 and 20-DMA while 100-DMA of 17,630 will be the next hurdle. On the downside, 17,100 should act as immediate and strong support now.
BankNifty also respected its 200-DMA and managed to close above its 20-DMA of 38,150. If it manages to trade above 38,150 then we can expect a move towards the 39,000-39,500 zone. On the downside, 37,500-37,000 will act as a strong support zone.
Here are three buy calls for next 2-3 weeks:
Bandhan Bank: Buy | LTP: Rs 326 | Stop-Loss: Rs 306 | Target: Rs 363 | Return: 11 percent
The counter has broken out a long downsloping channel and now it is ready to breakout bullish flag formation. It is respecting its 20-DMA beautifully and trading above all important moving averages.
Momentum indicator RSI (relative strength index) is holding the support of 60 and witnessed a positive crossover while ADX (average directional index) and MACD (moving average convergence divergence) are positively poised to support the current strength.
It has relative strength to BankNifty therefore it may outperform the benchmark index in the coming days.
DLF: Buy | LTP: Rs 371.55 | Stop-Loss: Rs 350 | Target: Rs 410 | Return: 10 percent
The counter is moving in the downsloping channel where it took support at lower trend line support that coincides with 200-DMA and formed a bullish candlestick pattern that may lead to a strong bounceback in this counter towards 100-DMA of Rs 410.
RSI and Stochastics are bouncing back from the oversold territory with positive divergence on the daily chart. If we look at the Nifty realty index then it is also bouncing back from its 200-DMA.
Easy Trip Planners: Buy | LTP: Rs 596 | Stop-Loss: Rs 540 | Target: Rs 700 | Return: 17 percent
The counter is moving in upsloping channel formation where it tested lower end with bullish candlestick formation and managed to close above all important moving averages.
Rs 600-620 is a minor resistance area and if it manages to cross this zone then we can expect a rally towards Rs 700 level. Momentum indicator RSI is positively poised and MACD is trading above centreline.
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