By Rupak De, senior technical analyst at LKP Securities
The Nifty 50 witnessed selling pressure as it encountered resistance near the previous swing high, resulting in a weak closing on April 30. Other indicators such as the 20-day simple moving average (SMA) and the 50-day SMA are positioned below the index value, suggesting that the ongoing positive trend remains intact.
The relative strength index (RSI) also indicates a bullish crossover. Over the next few days, the trend in the headline index might remain sideways unless it breaks above the all-time high of 22,783. On the downside, immediate support is placed at 22,500, below which the index might decline further.
The BankNifty experienced a volatile trading session on the expiry day, with bulls prevailing in the first half and bears asserting dominance in the latter half. While the index didn't quite breach the 50,000 level, the overall sentiment remains bullish.
Any declines in the index should be viewed as buying opportunities, particularly given the substantial support observed around the 49,000 level, which corresponds to the highest open interest on the Put side.
Here are three buy calls for short term:
Ashok Leyland: Buy | LTP: Rs 193 | Stop-Loss: Rs 184 | Target: Rs 205 | Return: 6 percent
The stock has experienced a notable breakout on both daily and weekly charts. Additionally, it has shown a consolidation breakout on the monthly chart. It continues to hold above short-term moving averages, suggesting positive momentum.
Moreover, the RSI exhibits a bullish crossover, indicating potential further upside. In the short term, the stock might continue to ascend towards higher levels, with a potential target of Rs 205. Support on the lower end is positioned at Rs 184.
Godrej Industries: Buy | LTP: Rs 960.6 | Stop-Loss: Rs 894 | Target: Rs 1,100 | Return: 14.5 percent
The stock has broken out of a Cup and Handle pattern and has been trading confidently above the rim for the last two trading sessions, confirming the strength of the breakout. The daily RSI is showing a bullish crossover and is trending upwards.
The overall trend appears positive as the price remains above the critical 20-day simple moving average (SMA). In the short term, the stock might continue to ascend towards higher levels, with a potential target of Rs 1,100. Support on the lower end is positioned at Rs 894.
Finolex Cables: Buy | LTP: Rs 1,053 | Stop-Loss: Rs 1,000 | Target: Rs 1,200 | Return: 14 percent
The stock has moved up after consolidation on the daily chart, suggesting a rise in optimism among the participants. Lately the stock price has moved back above the long term moving average 200SMA, pointing towards a bullish trend.
The RSI is in bullish crossover and rising on the daily timeframe. In the short term, the stock might continue to ascend towards higher levels, with a potential target of Rs 1,200. Support on the lower end is positioned at Rs 1,000.
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