Nifty has been trading within a range of 200 points with high volatility for the last couple of trading sessions.
Prices, on the daily chart, have taken resistance at 141.40 percent Fibonacci extension which is placed at around 15,232 levels from its previous intermediate low of around 13,596 levels.
On February 10, the benchmark index traded flat and swung both ways through the day.
Later, in the final 30 minutes, it recovered almost a hundred points from the low and closed near its previous day’s closing price.
In the previous week, we witnessed some extraordinary bullish momentum where the index closed almost nine percent higher.
So, for this particular week, the index is likely to take a breather and most likely will consolidate within a very narrow range with a pinch of volatility.
On the daily chart, the index is trading within a rising channel formation and has currently halted near the upper band of the said pattern.
We are not getting any clear signal from the India VIX as it is reading in the range of 15 -25 (10 points).
A breakout above 25 level will be an alarming sign for the Nifty.
Bank Nifty, after registering its lifetime high in Friday’s trading session, witnessed a profit-booking and formed a bearish gravestone Doji candlestick pattern on the daily interval.
A close above the pattern which is placed at 36,600 levels will open the gate for 38,000 in the coming weeks.
At the lower end, support for the Nifty is seen at 14,750 on the daily chart. The higher-end break of 15,250 will open the gate for 15,400 in the coming weeks.
Here are three buy calls for the next 2-3 weeks:
SBI Life Insurance Company | LTP: Rs 911.35 | Target price: Rs 990 | Stop loss: Rs 865 | Upside: 9%
After a month of consolidation, this stock has witnessed a falling wedge pattern breakout on the daily timeframe and is currently trading above its trendline support.
A recent minor retracement has found support near a 50-day exponential moving average and currently, it is trading above its 50 and 21-day EMA which is positive for the counter in the near-term.
The stock has found support near 61.80 percent Fibonacci retracement which is placed at Rs 832 from its previous intermediate low on the weekly interval.
On the daily chart, this stock has completed a ‘bullish bat harmonic pattern’ and is trading above its potential reversal zone (PRZ).
It is trading above its 100-day exponential moving average on the daily timeframe. RSI (14) is taking support near its previous support levels which is placed near 40 levels on the daily timeline.
It has taken support at 50 percent retracement from its previous intermediate low on the weekly timeframe.
Besides, it is trading in a higher high higher low formation on the weekly interval.
Indraprastha Gas | LTP: Rs 556.50 | Target price: Rs 595 | Stop loss: Rs 530 | Upside: 7%
After a prolonged consolidation, this stock has witnessed a smaller degree ascending triangle pattern breakout on the daily interval.
This week, it has given a fresh breakout above the key resistance level of Rs 548.
Besides, the stock has managed to close above its 21 and 50-day exponential moving averages on the daily chart which is placed above Rs 540 and Rs 516 levels.
Positive divergences on secondary oscillators with rising volumes also support the next up-move in the prices.
RSI (14) has also witnessed a trendline breakout above 45 level with bullish crossover and is currently reading above 50 level on the daily timeframe.
(The author is a technical analyst at Bonanza Portfolio)
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