Vishal Wagh, Research Head at Bonanza Portfolio
The benchmark indices on December 29 saw a sideways opening and remained sideways the entire day. Global peers were a mixed bag. It seems that everyone is waiting for some news to react on. The current situation seems like a stall mate scenario.
The range of 17,000-17,300 is very tight and bulls and bears are defending their respective territory very strongly. The major averages are flatting out. It shows that upper side move will be limited though downside also kept near to 17,000.
Till the said range is in progress, there won't be any big move. The breakout and its follow-up will decide a further course of action in the market.
Bank Nifty, the major component of the index is underperforming broadly. It is the major hurdle in further progress for Nifty.
Here is one sell call and one buy call for next 2-3 weeks:
Ambuja Cements: Sell | LTP: Rs 375.80 | Stop-Loss: Rs 388 | Target: Rs 347 | Return: 7.6 percent
Ambuja Cements is consistently in lower low and lower high chart formation. At the same time, the recent bounce is getting stalled around Rs 382 levels.
It has created a 'Black Cloud Cover' Pattern. All this price action is indicating that bears are still in action.
RSI (14,9) is currently reading below 50. At the same time, stochastic (5,3,3) is also cut moving average down from the overbought zone.
The super trend (8:3) is indicating that it is near to resistance. On the downside, the recent low of Rs 347 will provide small support. If the same get broken down, then the next level of support will be at Rs 338 levels.
Aptech: Buy | LTP: Rs 406.25 | Stop-Loss: Rs 364 | Target: Rs 470+ | Return: 15.7 percent
Aptech is in a longer-term bullish trend. The current upward trend had faced consolidation in the form of a downward sloping channel. The channel has a width of around 70 points. The same channel has shown breakout by strong move gains of 11.87 percent today.
The move is well supported by super trend (8:3) and 20 EMA (exponential moving average). Both of them have provided very strong support and prices managed to break out of the range.
RSI (14,9) is currently reading 65. It has also given the breakout on the downward sloping trend line. At the same time, stochastic is sustaining well above the moving average. It indicating towards further strength in the stock.
Depth of the channel is around 70 points and breakout has been witnessed at Rs 400 levels. So, the probable target will be Rs 470+.
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