By Vidnyan Sawant, HOD - research at GEPL Capital
A corrective move was observed in the last couple of weeks following a fresh life high at the 21,834 level on the weekly chart, where the Nifty formed a lower top and lower bottom formation, indicating profit booking at higher levels. However, on the daily charts, the index has been consolidating in the range of 21,450 – 21,835 levels for the past couple of weeks.
Critical technical indicators, notably the relative strength index (RSI), consistently depict positive momentum, maintaining levels above 60 across daily, weekly, and monthly intervals. This sustained strength in RSI instills confidence in the enduring positive momentum in the medium to long term.
Looking forward, the immediate resistance for Nifty is identified at the record high level of 21,834, with an additional resistance level at 22,000. On the downside, crucial support levels are recognized at 21,330 and 20,975.
Considering the overall chart structure, a bullish stance is maintained with specific targets set at 21,834 and 22,000 for the short to medium term. This analysis suggests a positive trajectory for the index, indicating a likelihood of sustained gains in the near term.
Here are three buy calls for next 2-3 weeks:
HDFC AMC: Buy | LTP: Rs 3,502 | Stop-Loss: Rs 3,309 | Target: Rs 3,922 | Return: 12 percent
HDFC Asset Management Company is currently surging at its 52-week high, sustaining a bullish trend that originated from the low in March 2023, and showcasing enduring positive momentum. The stock exhibits a remarkable pattern of maintaining higher tops and higher bottoms without significant dips, portraying a robust upward trajectory.
The ADX (average directional index) study this week reveals a strong trend, with the ADX line surpassing the 50 mark. This shows the strength in the ongoing trend, while the +DI (directional indicator) above 30 further emphasizes the stock's robust momentum for a sustained upward trajectory.
Adding to the positive outlook, the concept of mean reversion is evident. Dips towards the short-term 12-week EMA (exponential moving average) consistently act as crucial support levels, contributing to the stock's bullish stance.
Looking forward, there is an anticipation of further price ascent towards Rs 3,922 mark. It is recommended to set a stop-loss at Rs 3,309, strictly based on the closing basis.
Gujarat Gas: Buy | LTP: Rs 541 | Stop-Loss: Rs 511 | Target: Rs 620 | Return: 14 percent
Gujarat Gas is currently trading at its 52-week high, after a surge of approximately 35 percent from its 52-week low in October 2023. This rapid retracement suggests strong buying pressure and potential for further upside.
The stock also appears to have undergone a structural reversal, with a double bottom formation at the 52-week low coincide with change of polarity followed by a breakout from the downtrend line. This breakout was accompanied by a significant surge in volume, which further validates the bullish outlook.
The MACD (moving average convergence divergence) indicator has played a supportive role, registering a positive crossover in the recent week and current week it is maintaining its position at positive territory. This affirms the stock's strong momentum and adds to the positive outlook.
Looking ahead, we anticipate further upward movement in prices, targeting Rs 620 levels. It is recommended to set a stop-loss at Rs 511 based on closing values.
Engineers India: Buy | LTP: Rs 216.4 | Stop-Loss: Rs 206 | Target: Rs 247 | Return: 14 percent
Engineers India has ignited a bullish surge, marked by a series of technical confirmations. The stock consistently climbs to higher highs and bottoms, painting a clear picture of sustained upward momentum. This momentum gained further traction with a recent breakout above the multi-year high of 2017, fueled by a significant surge in volume. This robust participation, surpassing the 10-week average, hints at the entry of larger investors, adding fuel to the rally.
The bullish sentiment is further corroborated by the ADX and DI indicators. The ADX of 43 signifies a strongly established trend, while the +DI hovering above 30 underlines the strength of the positive momentum.
The stock is trading comfortably above key moving averages, including the 12-week and 26-week exponential moving averages (EMA). This alignment with the moving averages not only supports the positive momentum but also enhances confidence in the stock's upward trajectory.
Looking ahead, we anticipate further upward movement in prices, targeting Rs 247 levels. It is recommended to set a stop-loss at Rs 206 based on closing values.
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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