Since last 10 sessions, the Nifty has been trading between the range of 17,200 to 18,000. At the current juncture on a weekly scale, the Nifty has formed a bearish shark pattern with a reversal zone of 17,900-18,000. Also, we are witnessing a reversal candlestick pattern on the weekly scale.
Even a bare minimum correction of 38.6 percent of the entire rally from 15,200 to 18,000 could lead to a bigger crack in the stocks. Thus, we maintain our stance that the prudent strategy can be to avoid fresh longs in the index and book profits in trading bets.
On the downside, 17,350 might be a crucial support for the coming week. A breach of this support might drag the index towards 17,000 mark. On the upside, 17,750-18,000 might be a supply zone for the coming weeks.
Along with the benchmark index, even the Nifty Bank index remained under pressure during the end of August month and retested 38,000 mark. However, the index recovered back to reclaim 39,000 mark.
We maintain a cautious stance on the Nifty Bank index and below 38,000, we might see a corrective move towards 37,000-36,000 in the coming sessions. The view would be negated above the 40,000 mark on a closing basis.
Here are three buy calls for next 2-3 weeks:
Balrampur Chini Mills: Buy | LTP: Rs 361 | Stop-Loss: Rs 320 | Target: Rs 420 | Return: 16 percent
Since April 2022, the counter observed free fall from Rs 526 till Rs 331 and it has stabilized near its historical support of Rs 335. From candlesticks pattern perspective during August month the counter has displayed pair of Doji's followed by pair of Inverted Bullish Hammer along with volume steadily increasing which is hinting upside.
From indicator perspective, daily RSI (relative strength index) has made impulsive structure near oversold zone nicely which further confirms upside in counter. One can buy in small tranche at current levels and buy another tranche at around Rs 340 levels. Upside target is expected till Rs 420 and place a stop-loss of Rs 320.
Tinplate Company of India: Buy | LTP: Rs 318 | Stop-Loss: Rs 285 | Target: Rs 375 | Return: 18 percent
Tinplate Company has corrected almost 34 percent from its top of Rs 438 which was registered on April 13, 2022. On weekly scale, it has taken support near its previous historical support zone Rs 290-300.
Since last one month it has made nice base near Rs 300 levels. Recently on daily scale, the stock confirmed a Bullish Inverted Hammer candlestick pattern exactly at the mentioned historical support and that is adding more confirmation of further upside in the counter.
In addition to the above discussed technical reasoning, weekly RSI has nicely bounced back from 40 levels which is adding more strength in the said counter. Thus we advise traders to buy the stock for an upside target of Rs 375 with a stop-loss of Rs 285.
HDFC Life Insurance Company: Buy | LTP: Rs 575 | Stop-Loss: Rs 538 | Target: Rs 650 | Return: 13 percent
The stock has corrected almost 35 percent from its top of Rs 774 which was made on August 30, 2021. From March 2 till August 12, it has been hovering near the crucial support zone of Rs 520-550.
Recently on weekly scale the stock made Bullish Harami candlestick pattern along with volume picking up exactly near said support zone which is a possible sign of early reversal.
Thus we advise traders to buy the stock for an upside target of Rs 650 with a stop-loss of Rs 538.
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