Nifty has been consolidating for the last five consecutive weeks in the range of 15,450-15,915.
The benchmark index formed a weekly low at 15,632 which was very close to the previous swing bottom support of 15,635.
There are good chances that this support could result in a bullish double bottom formation in the coming sessions.
The primary trend of the index is bullish as Nifty has been holding above its 50, 100, and 200-day moving averages.
Below 15,600, Nifty would change its trend from bullish to bearish and till that happens, traders should make stock and sector-specific bullish bets.
The breadth of the market is very strong which is a very good sign. Out of the last 12 sessions, advances remained higher than the declines in eight sessions.
This is a positive development for the continuation of an uptrend.
From the sectors, realty, infra, cement and logistics are expected to do well from hereon.
A sustained rise above 15,900 would result in a fresh breakout and in that case, we can expect Nifty to extend the rally towards 16,200-16,300.
A close below 15,600 would violate the current consolidation on the downside.
At present, trading opportunities are more visible in the mid and small-cap sides and the focus should be more on these segments.
Here are three buy calls for the next 2-3 weeks:
Capacite Infraprojects | LTP: Rs 231.20 | Target price: Rs 267 | Stop loss: Rs 216 | Upside: 15.5%
The stock closed above the crucial multi-top resistance of Rs 230 on the daily charts.
It has broken out from the 5-month consolidation phase. Volumes during the breakout remained significantly higher than its 10-day average volumes.
The primary trend of the stock has been bullish as it has been forming higher tops and higher bottoms on the daily and weekly charts.
J Kumar Infraprojects | LTP: Rs 198 | Target price: Rs 225 | Stop loss: Rs 185 | Upside: 14%
On July 6, this stock surged more than 6 percent with a significant jump in volumes which was its first attempt to breakout from the 5-month long narrow consolidation.
However, after the sharp up-move of July 6, this stock went into the consolidation mode once again.
On July 12, it rose about 2 percent with higher volumes and it seems set to break out from the big consolidation.
It is placed above medium to long-term moving averages, indicating a bullish trend on all timeframes.
Indicators and oscillators on the weekly and monthly charts have turned bullish.
Federal Bank | LTP: Rs 89.50 | Target price: Rs 96 | Stop loss: Rs 85 | Upside: 7%
This stock has broken out from the downward sloping trendline on the daily charts.
Bullish inverted head and shoulder pattern breakout is also seen whereas volumes have confirmed the breakout on the daily charts.
It has been finding support at its 50-day EMA. Indicators and oscillators have been showing strength in the current uptrend.
The stock is placed above medium to long-term moving averages, indicating bullish trends on all timeframes.
Moreover, the banking sector is expected to resume its primary uptrend.
(The author is a technical research analyst at HDFC securities)
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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