Vishal Wagh, Research Head at Bonanza Portfolio
Nifty opened with a gap down and closed in red below 17,000 mark amidst global sentiment on September 28. However, on the daily chart, Nifty has made an Inverted Hammer candle, which indicates small recovery may possible. In addition, Nifty is seen to be making Lower highs and lower lows which indicate the possibility of a negative market.
Technical indicator Ichimoku Cloud suggests that prices are trading below the conversion line and base line which point out a negative trend in the market.
The momentum oscillator RSI (14) on the daily chart is at around 33; whereas MACD histogram is hovering in the negative territory with a declining trajectory which points to a weaker momentum.
Important support levels for Nifty are at around 16,700, 16,500, and 16,400 whereas the resistance levels are at 16,900, 17,000, and 17,200.
Here are two buy calls for next 2-3 weeks:
GMM Pfaudler: Buy | LTP: Rs 1,903.35 | Stop-Loss: Rs 1,805 | Target: Rs 2,040 | Return: 7 percent
After a long consolidation, the stock has given a breakout of “sideways channel” and the price has made a new two-year high of Rs 2,110 on September 6, 2022.
Recent breakout supports the price & it has been rising continuously with Higher Highs and Higher Lows formation in the last couple of weeks.
In addition, on a daily chart, the price has also formed a Bullish Flag pattern and is trading above the 50 exponential moving average, which indicates a continued bullish trend.
The 20 exponential moving average provides immediate support to the price with Bullish Engulfing candlesticks, which indicates a bullish set-up in the counter. Moreover, an oscillator Stochastic RSI is at an oversold zone, which confirms bullish momentum in the near future.
Hence, based on above technical structure one can initiate a long position in GMM Pfaudler at CMP Rs 1,903.35 or a fall in the price till Rs 1,880 levels can be used as buying opportunity for the upside target of Rs 2,040. However, the bullish view will be negated if the price closes below the support level of Rs 1,805.
Sun Pharmaceutical Industries: Buy | LTP: Rs 917.85 | Stop-Loss: Rs 890 | Target: Rs 960 | Return: 5 percent
After a long bearish trend, the pharma indices has recovered from bottom and formed “Flag & Poll” pattern, which suggests bullish strength in pharma sector.
In the last trading session, Sun Pharma witnessed a huge upside momentum even in a bearish market, which suggests bullish strength. In addition, first, the price has taken support to the lower band of Symmetrical Triangle Pattern with Hammer candlesticks and then given breakout with spurt volume, which confirms the continuing bullish trend.
On the momentum front, the indicator RSI (14) has also sustained above 50 levels & MACD histogram is hovering in the positive territory, which indicates positive strength.
Hence, based on the above technical structure one can initiate a long position in Sun Pharma at CMP Rs 917.85, or a fall in the price till Rs 905 levels can be used as buying opportunity for the upside target of Rs 960. However, the bullish view will be negated if the price closes below the support level of Rs 890.
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