The Nifty has risen for the fourth consecutive session, to close at 17,340. It has gained 2,173 points from the bottom of 15,183 registered in June 2022. During this rally, the benchmark index has made higher top and higher bottom formation four times on the daily charts. It has also surpassed the major swing high of the previous top placed at 16,793. It has now reached above its 50, 100 and 200 days EMA (exponential moving average), which indicate bullish trend for the medium to long term.
Oscillators like RSI and MFI (money flow index) have reached overbought zone on the daily chart of the Nifty.
By closing above 17,300, the Nifty has taken out the 61.8 percent retracement of the entire downswing seen from an all-time high of 18,604 to the June 2022 bottom of 15,183. Surpassing 61.8 percent (Golden Ratio) normally indicates the negation of a previous downtrend.
Next resistance for the Nifty is seen at 76.4 percent retracement of the swing, which is placed at 17,797. Short-term support for the Nifty is seen at its five-day EMA, placed at 17,000-odd levels, while far support is seen at the previous breakout level of 16,800.
We see traction shifting from large-cap stocks to mid-cap stocks. We expect better times for the traders in August as mid-caps and small-cap could outperform the benchmark indices.
From the NSE500 index, the number of stocks above their simple 200-DMA have reached 41 percent from 14 percent seen in June 2022, which indicates continuous improvement in the breadth of the market. The rupee has started showing strength against the dollar. ICE Dollar Index itself seems to have topped out for the medium term, which can improve the equity market sentiment globally.
Here are three buy calls for next 2-3 weeks:
Gujarat State Fertilizers & Chemicals (GSFC): Buy | LTP: Rs 167.15 | Stop-Loss: Rs 154 | Targets: Rs 182-197 | Return: 9-18 percent
The stock has broken out from the downward sloping trend line on the daily and weekly charts. On July 22, it opened up with the big gap up with significant jump in volumes. Stock price is placed above 20, 50, 100 and 200 days EMA, which indicates bullish trend on all time frames.
Indicators and oscillators like RSI, MACD and ADX have been showing strength in the current uptrend. After few days of consolidation, stock has resumed its uptrend.
The stock price has been forming higher tops and higher bottoms on daily chart. It can be bought in two tranches one at CMP and second at Rs 159, for the targets of Rs 182 and Rs 197, keeping stop-loss at Rs 154.
Indoco Remedies: Buy | LTP: Rs 398.40 | Stop-Loss: Rs 370 | Targets: Rs 426-450 | Return: 7-13 percent
The stock has broken out from the consolidation with jump in volumes. It has also broken out from downward sloping trendline on the weekly charts.
It has sustained above its 200 days EMA on closing basis after long time. Indicators and oscillators have turned bullish on the daily chart. The stock can be bought in two tranches one at CMP and second at Rs 375, for the targets of Rs 426 and Rs 450, keeping a stop-loss at Rs 370.
Balaji Amines: Buy | LTP: Rs 3,543.10 | Stop-Loss: Rs 3,400 | Targets: Rs 3,795-3,900 | Return: 7-10 percent
The stock price has taken out crucial double top resistance placed at Rs 3,500 odd levels. It has formed rounding bottom formation on the daily chart.
Volumes have gone up along with the price rise. Stock has been forming higher top and higher bottom formation on the daily chart.
It has hit fresh 6 months high above Rs 3,500. Stock can be bought in two tranches one at CMP and second at Rs 3,450, for the targets of Rs 3,795 and Rs 3,900, keeping a stop-loss at Rs 3,400.
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