The week ended March 15 proved to be challenging for bullish investors as the broader markets experienced their most significant decline in recent memory. While the Nifty 50 index saw a modest loss of nearly 2 percent over the week, the Nifty Smallcap 250 index faced a substantial correction of 6 percent, and the Nifty Midcap 150 index declined by over 4 percent. Despite this market turmoil, some relief emerged as the Nifty 50 managed to close above the crucial 22,000 mark.
Earlier discussions centred around the 22,500 mark, representing the 100 percent extension of a previous move. As anticipated, a corrective move ensued from that level, leading to a trendline breakdown in the Nifty 50. However, this breakdown would only be invalidated if the index closes above 22,200.
On the downside, 21,850 stands as a crucial support level, and breaching it might push the index towards the 21,600 level.
Turning to the Nifty Smallcap 250 index, it has already corrected over 50 percent of the rally that commenced in October 2023. Additionally, a bullish harmonic pattern resulted in a sharp bounce during Thursday's trading session. Meanwhile, the Nifty Midcap 150 index retested its 100-day exponential moving average (DEMA) before witnessing a notable rebound.
Looking ahead, while there might be another shake-off in the market in the near term, investors could view this as an opportunity to initiate fresh long positions. It is anticipated that the market uncertainty will likely dissipate by the end of the month, allowing the markets to resume their primary upward trend.
On a different note, the Nifty Bank corrected approximately 3 percent during the last week, closing near the 46,500 mark. Currently, it rests on falling trendline support, which would be breached below the 46,000 level. Thus, for the upcoming week, 46,000 remains a critical support level for the index. A sustained hold above this level could pave the way for a recovery, with a move beyond 47,000 potentially reigniting bullish momentum.
Here are three buy calls for next 3-4 weeks:
ITC: Buy | LTP: Rs 419 | Stop-Loss: Rs 390 | Target: Rs 475 | Return: 13 percent
After reaching a peak near Rs 475 mark on January 4, 2024, ITC has experienced a significant decline of 16 percent. However, in the subsequent 18 trading sessions, ITC has shown stability by avoiding further declines and has instead consolidated within a range of Rs 400-416. Notably, in the previous trading session, there was notable buying interest observed at lower levels, accompanied by substantial trading volume.
From a technical standpoint, the formation of a bullish AB=CD pattern on the daily chart of ITC within the mentioned price zone of Rs 400-416. Interestingly, this zone also coincides with the 0.382 percent retracement level of a price swing that occurred between January 2023 and July 2023, as indicated on the chart.
Additionally, it has formed complex structure forming on the daily RSI indicator, resembling a 'W shape' below the 30 level, which suggests a potentially lucrative buying opportunity.
Thus, one can buy in the zone of Rs 415-425 with an upside target of Rs 475 and a stop-loss would be placed near Rs 390 on a daily close basis.
Britannia Industries: Buy | LTP: Rs 4,974 | Stop-Loss: Rs 4,790 | Target: Rs 5,250 | Return: 5.5 percent
Following a peak near Rs 5,386 level, Britannia experienced a significant decline of almost 11 percent in its value. However, over the past couple of months, Britannia has stabilized around Rs 4,800 levels, forming a prolonged support base. Notably, this level coincides with the 200-day exponential moving average (DEMA) and represents a 50 percent retracement of its previous upward movement from November 2023 to December 2023, as depicted in the provided chart.
Additionally, a bullish AB=CD pattern has emerged near Rs 4,800 level, further confirming positive market sentiment. Furthermore, the daily stochastic indicator indicates a bullish divergence, suggesting a favourable outlook for the
Therefore, investors may consider initiating buy positions within the range of Rs 4,950-4,980, targeting an upside objective of Rs 5,250, with a stop-loss set at Rs 4,790 on a daily closing basis.
Aegis Logistics: Buy | LTP: Rs 381 | Stop-Loss: Rs 355 | Target: Rs 430 | Return: 13 percent
On March 7, 2024, Aegis Logistics reached a high of Rs 455. Since then, it has experienced a significant decline of 21.5 percent in its price. Presently, the stock has found support at the 200-day exponential moving average (DEMA). Additionally, on the hourly chart, a bullish BAT pattern has formed in the range of Rs 360-370 levels, coinciding with the vicinity of the 200 DEMA.
Furthermore, on the indicator front, the hourly RSI has displayed a complex structure near the oversold zone, indicating a bullish stance.
Given these technical indicators, investors may consider buying in the zone of Rs 375-385, with an upside target set at Rs 430. A prudent stop-loss strategy would involve placing it near Rs 355 on a daily closing basis.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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