Nifty has given a 3 percent return in the last three trading sessions, which indicates a strong consolidation breakout.
The index has given a bullish pole flag pattern breakout and higher high higher low formation is likely to continue going ahead.
Momentum oscillator RSI (14) has also given a horizontal trendline breakout at 63 level and is currently closed at 69 level with bullish crossover on the daily interval.
Since the index is trading in uncharted territory, Fibonacci extensions suggest 16,500 will be the next resistance for the index.
Support is placed near 16,000 which was the previous resistance zone.
Bank Nifty has outperformed the benchmark index and has gained 4 percent in the last three trading sessions.
The banking index has also filled its gap which was created on July 19 which indicates a strong positive trend is unfolding in the counter. Immediate support for the Bank Nifty is placed near 35,061 and resistance is pegged near 36,550 level.
Here are three buy calls for the next 2-3 weeks:
SBI | LTP: Rs 456.15 | Target price: Rs 489 | Stop loss: Rs 438 | Upside: 7%
SBI has witnessed a smaller degree downward sloping trendline breakout on the daily timeframe and the stock is trading above its trendline resistance.
It is also trading above its short and medium-term exponential moving averages which is a positive sign.
There has been above-average volume on the day of the breakout which confirms price-volume breakout on the daily timeframe.
Momentum oscillator RSI (14) has also given a range breakout and is reading near 60 level on the daily interval.
HDFC | LTP: Rs 2,672 | Target price: Rs 2,864 | Stop loss: Rs 2,568 | Upside: 7%
HDFC has shown a sharp recovery from the low of Rs 2,380 made on July 28.
Since February 15, HDFC had been trading in a lower high formation for four months and formed a descending triangle pattern on the daily chart.
On the daily chart, the stock has broken out its descending triangle pattern on an upside and the MACD generated a fresh positive crossover signal.
Momentum oscillator RSI (14) is reading above 60 level with positive crossover on the daily scale, which indicates the uptrend may continue in the counter.
Bharti Airtel | LTP: Rs 574.60 | Target price: Rs 607 | Stop loss: Rs 556 | Upside: 6%
On the weekly timeframe, this stock has moved out of a consolidation phase. On July 28, it gained momentum and broke out of a consolidation phase which was backed by good volume build-up.
It has been trading below its 21 and 50-day exponential moving averages on the daily and weekly chart.
It has also witnessed a symmetrical triangle pattern breakout on the weekly chart and has sustained above its trendline support.
RSI plotted on the weekly time can be seen above the 50-mark. It is moving higher towards the overbought levels, indicating the presence of bullish momentum as the prices move higher.
(The author is a Technical Analyst at Bonanza Portfolio)
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