Nifty50 on the daily chart is moving in a higher high higher bottom formation from past two months and has given an approximately 17 percent in a very short span of time.
Benchmark index on August 17 witnessed a flat to positive opening tracking global peers and continued to trade in green throughout the day with higher bottom formation on the intraday charts.
The index has closed above its downward sloping trend line on the daily chart and prices are currently sustaining above the same. The closing above the trend line indicates a breakout in the prices.
The momentum oscillator RSI (relative strength index 14) on the daily has reached above the overbought zone (70) and still trending higher. The RSI reading above 80 levels on the daily chart is an alarm sign for bulls as we may see a dip or a correction in the prices soon. The MACD (moving average convergence and divergence) indicator has also reached above its previous high levels and the distance between its lines of polarity has increased significantly.
The immediate support for the Nifty is placed at 17,750 and below those 17,600 levels. The upside resistance is capped near 18,100 & 18,250 levels.
Here are two buy calls for next 2-3 weeks:
NTPC: BUY| CMP: Rs 161.45 | Stop-Loss: Rs 155 | Target: Rs 170.50 | Return: 6 percent
The prices witnessed an Inverted Head & Shoulder pattern breakout on August 17 which was placed above Rs 159 levels on the daily time frame. The stock has closed above its neck line support which is an additional confirmation for the pattern.
The prices are also sustained above its 21-day exponential moving average which is placed at Rs 155 levels. The counter is also trading near the upper band of the Bollinger band indicates a possible continuation of the uptrend after the recent consolidation.
Momentum oscillator RSI (relative strength index 14) is reading in a higher high higher bottom formation on the daily time frame. MACD indicator has crossed above its line of polarity.
Ambuja Cements: Buy | LTP: Rs 398.30 | Stop-Loss: Rs 382 | Target: Rs 422 | Return: 6 percent
The prices consolidated in a very narrow range from Rs 360 – 380 levels for more than three months and formed a consolidation band on the daily as well as weekly chart.
The stock has given a range breakout with above average volumes which indicates a change of a trend from sideways to the bullish. The prices are also sustained above its 21-day exponential moving average which is placed at Rs 380 levels.
Momentum oscillator RSI (14) is reading in a higher high higher bottom formation on the daily time frame. MACD indicator has crossed above its line of polarity.
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