Nifty50 on March 2 witnessed a gap down opening tracking global peers and continued to trade in a negative terrain without disturbing its previous day's low. The prices have closed one percent lower but managed to settle within its previous day's range and formed an inside day pattern on the daily scale.
While coming to a daily chart, prices have breached the horizontal trend line support which was placed at 16,800 levels and also confirmed a consolidation break down. From the last three trading sessions, prices have likely completed pullback near the trend line resistance which is placed at 16,700 – 16,800 levels.
Indian bourses have also formed a bullish ABCD Harmonic Pattern on the weekly chart and its prices have closed above the PRZ (potential reversal zone). One of the important observations from the FII & DII side observed this week includes a buying on every dip from the DIIs indicates support from Indian institutions at lower levels.
Currently, support for the Nifty is placed near 16,400 and 16,200 levels, and breaking below these levels will open the gate for 15,800 levels in the coming weeks. The upper band is capped near 17,100 and once the gap gets filled then the range might extend till 17,400 levels.
Here are two buy calls and one sell recommendation for next 2-3 weeks:
Asian Paints: Sell | LTP: Rs 3,029 | Stop-Loss: Rs 3,100 | Target: Rs 2,909 | Return: 4 percent
Asian Paints is trading in a Head & Shoulder pattern since last four months and has formed a neckline support at Rs 3,100 levels. On March 2, prices have witnessed a neckline breakdown of a Head & Shoulder pattern and have given a negative breakdown in the counter.
Prices are sustaining below all its important exponential moving averages on the daily interval. In the previous three occasions, prices have rebounded from its neckline support placed at around Rs 3,100 levels but March 2, prices forcefully closed below the support levels.
Majority of the indicators and oscillators are indicating a negative range shift in the prices. Counter has also witnessed an above average volume during breakdown indicates a price volume breakdown.
Max Financial Services: Buy | LTP: Rs. 853.5 | Stop-Loss: Rs 815 | Target: Rs 918 | Return: 7.5 percent
The prices are trading in a lower low lower high formation since second week of January and prices continued to trade within the falling wedge pattern on the daily time frame.
Max Financial has witnessed a falling trend line breakout on the higher side and closed convincingly above its support zone and formed a bullish Engulfing candle stick pattern on the weekly scale.
Momentum oscillator RSI (14) has formed a bullish divergence and has rebounded from its oversold levels indicates a sharp recovery ahead in the prices.
Aditya Birla Fashion & Retail: Buy | LTP: Rs 272.80 | Stop-Loss: Rs 260 | Target: Rs 295 | Return: 8 percent
ABFRL has bottomed out near Rs 250 levels and has formed a bullish three white soldier candle stick pattern on the daily interval. The prices have given a falling wedge pattern breakout above its trend line resistance and closed above the high of previous day's candle.
On the weekly also, prices have formed a bullish Engulfing candlestick pattern and if the prices closed above the high of the candle then the validity of the pattern will be confirmed. The counter is firmly finding the support near its 50-week exponential moving average.
Oscillators are still reading below 50 levels but have managed to hook up from the lower levels indicates a rise in the momentum in the further trading session.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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