On the weekly timeframe, we can spot that the prices have taken support from the 50 percent Fibonacci retracement level of the prior advance from 16,747 (September 2022) till 18,887 (November 2022), which is again in sync with the bearish trendline which shows change in the polarity.
Nifty on daily charts we can spot that the prices are trading below the 20-day SMA (simple moving average). However still it is trading in a range of 17,770 – 18,265 levels since last few weeks.
The momentum indicator RSI (relative strength index), plotted on the weekly timeframe is moving near 50 level confirming the lack of momentum.
The Nifty has immediate resistance placed at 18,038 (20-day SMA) followed by 18,265 (key resistance) levels. The downside support for the index is placed at 17,770 (swing low) followed by 17,600 (key support).
Based on the overall trend and indications from indicators, it is expected that the Nifty will stay in rangebound territory of 17,770 – 18,265 level. While a breach below the level of 17,770 can drag the prices lower till 17,600.
Here are three buy calls for next 2-3 weeks:
Maruti Suzuki: Buy | LTP: Rs 8,784 | Stop-Loss: Rs 8,440 | Target: Rs 9,765 | Return: 11 percent
The stock ended its correction at 50 percent Fibonacci retracement (Rs 8,076) of previous advance from Rs 6,536 – 9,769 and started moving up since last 5 weeks on the weekly charts indicating positive undertone of the stock.
On the daily charts the stock is forming higher top higher bottom formation on swing basis. Also the stock has formed CIP (Change in Polarity) near Rs 8,076 mark.
The stock consistently sustaining above its 20-day SMA since last 2 weeks with volume confirmation indicating strong demand zone created near that point.
The prices have given a Bollinger band squeeze breakout on the up side indicating volatility rises on a positive side.
The weekly relative strength index (RSI) has failed to reach lower levels (swing failure), indicating that the upward momentum of the stock is increasing.
Going ahead we expect the prices to go higher till Rs 9,765 level where stop-loss must be Rs 8,440 on the closing basis.
Persistent Systems: Buy | LTP: Rs 4,594 | Stop-Loss: Rs 4,200 | Target: Rs 5,385 | Return: 17 percent
The stock has bottomed out near Rs 3,100 level after forming Double Bottom formation on the weekly charts in September 2022 and since then it is maintaining Higher Top Higher Bottom formation indicating strong bullish undertone of the stock.
In the current week, the stock is giving breakout of Cup & Handle pattern with volume confirmation which indicates strong strength to the upside.
The stock on the daily timeframe is consistently trading near upper Bollinger Band which points towards the rising volatility for an up move.
The momentum indicator RSI on the weekly timeframe has shown range shift pointing towards rising momentum of the prices.
Going ahead we expect the prices to move higher till the level of Rs 5,385 where the stop-loss must be Rs 4,200 on the closing basis .
Carborundum Universal: Buy | LTP: Rs 941.45 | Stop-Loss: Rs 860 | Target: Rs 1,035 | Return: 10 percent
The stock took strong support at 20-month SMA and sustaining at 11-month high. This shows overall bullish undertone of the prices.
The stock has given a breakout of Cup & Handle pattern and sustaining above that breakout. This points towards the continuation of trend in the direction of breakout.
The stock has sustained above key moving averages of 50 and 200-day EMA (exponential moving average) which confirms the intact uptrend.
The uptrend is accompanied by higher volumes showing long built up in the stock.
The momentum indicator RSI has sustained well above 60 mark on the weekly timeframe and moving upward reflecting strong momentum.
Going ahead we expect the prices to move Higher till Rs 1,035 where the stop-loss must be Rs 860 on the closing basis.
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