The Nifty continued to trade lower for the second consecutive day on April 6 after a smart rally from 17,400 to 18,100 in just two trading sessions.
After consolidating for eight days, the Nifty witnessed a breakout on the daily chart above its horizontal trend line and gave a four percent return in a quick span of time.
The momentum oscillator relative strength index (RSI) formed a double top formation on the daily chart near 70 levels and since then, prices are seeing a throwback near their previous support zones.
The gap between the prices and the short-term exponential moving average (EMA) has increased, which indicates a possible opportunity for the throwback in the coming trading sessions.
India VIX continued to settle below 21-DMA on the daily time frame and has remained below 20 in the last couple of days. A VIX index drifting lower is definitely a good sign for traders as will be less volatility.
The index has been trading above all its major moving averages and importantly, it is sustaining well above its 200-day EMA. As the gap on the daily chart is still unfilled which is placed at 17,700 levels and below that 17,550 will act as immediate support for the Nifty.
The resistance is capped near 18,100 and a breakout will open the gates for 18,350 in the coming sessions.
Here are three buy calls for the next two to three weeks:
Aditya Birla Fashion & Retail: Buy | LTP: Rs 315.55 | Stop-Loss: Rs 301 | Target: Rs 338 | Return: 7 percent
The stock is trading in a higher high, higher bottom formation and has sustained above its short and medium-term exponential moving averages.
The counter on April 5 gave a downward trend line breakout with above average volumes and price volume breakout confirmation on the daily time frame.
The momentum oscillator RSI (14) is above 60 levels on the daily as well as the weekly time frame, hinting at a strong momentum on the broader time frame too.
Ambuja Cements: Buy | LTP: Rs 320.70 | Stop-Loss: Rs 307 | Target: Rs 345 | Return: 7.5 percent
The stock was trading in a consolidation basing formation for more than a month and formed a horizontal trend line resistance at Rs 314. It took strong support near 200–day exponential moving average on the broader time frame and is looking to accelerate higher.
The stock has broken out from the horizontal trend line on the daily chart with above average volumes. Momentum oscillator like RSI has witnessed trend line breakout, indicating a higher possibility of a sharp rise in the prices in the coming days.
SAIL: Buy | LTP: Rs 110.50 | Stop-Loss: Rs 104.40 | Target: Rs 121 | Return: 9.50 percent
The prices are trading in a lower low lower high formation since the second week of May 2021 and the stock has been moving within the falling wedge pattern on the weekly frame.
SAIL has witnessed a falling wedge breakout on the higher side and closed convincingly above its support zone. It formed a bullish engulfing candle stick pattern on the weekly scale and since then, prices haven't tested the lower band of the pattern.
Prices are trading well above important averages and momentum oscillator RSI has also witnessed a trend line breakout above 45 on the weekly interval.
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