The Nifty, which started its upward journey from June 20, continued to trade in the positive zone the entire day and closed 180 points higher at 16,521 on July 20.
This particular, prices have witnessed a two gap-up openings and both the gaps are unfilled, creating strong support for the index. The index closed above its 21, 50 & 100–day exponential moving averages (EMA) and the closest average support is 100-DEMA, placed at 16,430.
In the previous week, the Nifty has formed a Bearish Harami candlestick on the weekly charts. This week, prices have crossed the high of the pattern, indicating a failure of the bearish pattern which is positive for the index.
The momentum oscillator relative strength index (14) has on the daily chart formed a perfect higher bottom formation from 30 levels and is moving higher above 60 levels with positive crossover on the cards.
The Nifty has crossed some of its important hurdles and the next resistance levels, placed at 16,700 and 16,800, will be keenly watched. The immediate support for the Nifty is at 16,350 and 16,200.
Here are two buy calls for the next two-three weeks:
Jubilant Foodworks: Buy | LTP: Rs 577 | Stop-Loss: Rs 553 | Target: Rs 612 | Return: 6 percent
The stock witnessed a falling wedge pattern breakout on the daily chart and after that prices have continued to trade higher and crossed the important resistance zone. From the last four sessions, prices have completed the throwback of the pattern near its 21-day exponential moving average,e which is placed at Rs 554 on the daily scale.
On July 20, the stock resumed its upward journey after taking the support of its important averages and trading in a higher bottom formation. The RSI (14) is reading in a bullish range and finding continuous support from 50 levels.
The stock has also sustained above its 21-day exponential moving average. The counter is trading near the upper band of the Bollinger band, indicating a continuation of the uptrend after the recent consolidation.
Persistent Systems: Buy | LTP: Rs 3,514 | Stop-Loss: Rs 3,370 | Target: Rs 3,725 | Return: 6 percent
Persistent Systems has consolidated in a narrow range of Rs 3,100-3,350 for the past month and formed a downward sloping trend line resistance at Rs 3,350 on the daily time frame.
The stock formed a basing formation and a consolidation box on the daily time frame and has given a combined break out of consolidation and falling trend line with above-average volumes on the daily timeframe.
On the daily chart, RSI (14) has given a trend line breakout, which is placed near 50 levels with a positive crossover. The stock is trading above its 21 - day exponential moving averages on the daily time frame, which is a positive in the short term.
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