Nifty once again rejected the bearish setup which was formed on a daily timeframe chart and rallied strongly.
In the recent past, whenever the index has witnessed a whipsaw of bearish pattern, prices are more likely to register its next intermediate top.
On November 4, Nifty continued to remain in the green as the benchmark index closed 0.80 percent higher from its previous closing.
On the lower end, it found support just above the previous low on the daily chart.
India VIX remained in the range of 15.50 – 23. India VIX above 23 has witnessed the breakout of the rectangle patterns on daily as well as a weekly chart.
VIX normally goes up when there uncertainly among the traders.
Currently, the index is trading above its 21 and 50-day exponential moving averages on the daily timeframe.
Momentum oscillator RSI (14) is reading above 55 levels with bullish crossover. The bias looks positive for the near-term.
As of now, strong support comes at 11,700–11,650 levels.
If Nifty breaks this support then further downside would be there up to 11,550 levels that are supported with a 50-day exponential moving average on a daily scale.
Upside resistance comes at 12,025 – 12,050 levels.
Here are two buy calls for the next 2-3 weeks:
Dalmia Bharat | LTP: Rs 829.60 | Target price: Rs 890 | Stop loss: Rs 795 | Upside: 7%
The stock has witnessed a horizontal trendline breakout on the daily timeframe and prices are consolidating above the line of polarity.
The counter has been trading in a higher high higher low formation since the second week of September on a daily scale, which is positive formation when clubbed with trendline breakout.
A recent dip in prices can be used as an accumulation opportunity in the stock as prices are retesting its trendline support on the daily timeframe.
Prices are trading above its 21 and 50-day exponential moving averages on the daily chart.
Max Financial Services | LTP: Rs 612.20 | Target price: Rs 665 | Stop loss: Rs 585 | Upside: 9%
After a prolonged consolidation, the stock has witnessed a more than two years long horizontal trendline breakout on the weekly interval.
Moreover, prices have also given a breakout of an inverted head and shoulder pattern above its neckline resistance on the line chart.
The stock has completed its throwback near its neckline of the said pattern on the weekly timeframe.
On the daily and weekly charts, the stock has witnessed a shift of trend to the upward forming base with congestion.
Momentum oscillator RSI (14) is reading near 60 levels and prices are nicely poised above its 50 and 100-week exponential moving averages on the weekly timeframe.
(The author is a technical analyst at Bonanza Portfolio)
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