On the daily chart, Nifty50 has given a falling wedge pattern breakout on January 3, 2022 and has given a return of 3.50 percent to date without a meaningful correction. Meanwhile, on the broader time frame (weekly), prices have given a bullish flag pattern breakout and prices are inching near their previous lifetime high levels, which are placed at 18,600.
The structure of the index is in favour of bulls. Market breadth has remained at 2:1 with 35 stocks on the advancing side and 15 stocks on the declining side. The prices on the daily chart are trading in a higher top higher bottom formation.
A couple of weeks back prices were under a bit of pressure and were trading below their 21 & 50-day exponential moving average but a strong breakout in the current week has forced the prices to close above the said averages on the daily time frame.
Nifty50 is most likely to cap near its previous resistance zone which is placed at 18,600 and if the index manages to cross above the said level then 19,000 will be on the cards soon. The immediate support for the index is placed near 17,900 levels.
Bank Nifty after forming a Hammer candlestick pattern on the weekly chart, prices have shown a strong reversal on the higher side and have taken support at its 21-week exponential moving average on the weekly chart. Important supports are now at 37,600-37,200 and resistance is placed near 39,200-39,500.
Here are three buy calls for next 2-3 weeks:
Tata Motors: Buy | LTP: Rs. 507.25 | Stop-Loss: Rs 485 | Target: Rs 547 | Return: 7.8 percent
The prices were trading in a symmetrical triangle formation for the past one and half month and have formed a trend line resistance at Rs 498 levels.
The stock has broken out of an upper band of the pattern at Rs 503.70 levels on January 10 and the prices have registered a decisive breakout that suggests a change in the trend from sideways to upside. Stock is trading above its 21, 50 & 100- day exponential moving averages on the daily time frame, which is positive for the prices in the near term.
The MACD (moving average convergence divergence) indicator is reading above its centerline with a positive crossover above its signal line. Momentum oscillator RSI (14) (relative strength index) is reading near 60 levels which indicates positive momentum will like to continue ahead.
Indus Towers: Buy | LTP: Rs 275.80 | Stop-Loss: Rs 262 | Target: Rs 302 | Return: 9.50 percent
The stock has been trading in a lower low lower high formation since past three months and has formed a falling wedge formation on the daily time frame.
On the January 12, prices has given a breakout of a downward sloping trend line which was connected to a falling wedge pattern and stock has able to close above its 21 & 50 – day exponential moving averages.
The bullish breakout in the lower low lower high formation indicates a positive surge in the upside. Momentum oscillator RSI (14) is reading near 60 levels which indicates positive momentum will like to continue ahead.
Tata Communications: Buy | LTP: Rs 1,557.70 | Stop-Loss: Rs 1,460 | Target: Rs 1,750 | Return: 12 percent
The prices were trading in an inverted head & shoulder formation for the past five months and have formed a neck line resistance at Rs 1,520 levels.
Tata Communications has broken out of an inverted Head & Shoulder pattern and the prices have registered a decisive breakout that suggests a change in the trend from sideways to upside. From the last three to four trading sessions we have observed an above average volume activity in the counter which also suggests price volume breakout on the daily time frame.
Stock is trading above its 21, 50 & 100- day exponential moving averages on the daily time frame, which is positive for the prices in the near term.
The MACD indicator is reading above its centerline with a positive crossover above its signal line. Momentum oscillator RSI (14) is reading above 60 levels which indicates positive momentum will like to continue ahead.
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