The Nifty showed a strong recovery on September 27, finding support at the 50-day EMA (exponential moving average) of 19,550, and ended the day forming a bullish engulfing pattern.
On the upper side, the resistance is at 19,750. A clear breakout is necessary to anticipate a substantial rally in the index. A decisive move beyond 19,750 could potentially push the index towards 19,900. On the downside, support is established at 19,600.
Bank Nifty bulls displayed resilience by defending the key support level at 44,200, which coincided with the rising trendline support. However, the index is trading below its 20-day moving average (20DMA) at 45,000. A decisive break above this level could trigger significant short-covering.
The Bank Nifty is trading within a broad range of 44,200 to 45,000. A clear break on either side of this range will likely lead to trending moves. Within this range, the overall sentiment remains bullish, suggesting that a 'buy on dips' approach may be favourable.
Here are three buy calls for short term:
Motilal Oswal Financial Services: Buy | LTP: Rs 881.5 | Stop-Loss: Rs 840 | Targets: Rs 920-960 | Return: 9 percent
The stock found strong support at the descending trendline, accompanied by a notable increase in trading volumes. It has surpassed its previous week's high with a significant surge in trading volumes, confirming a bullish reversal.
Key support is evident at Rs 840 levels, which is expected to act as a buffer for the bulls. The stock's potential upside targets are set at Rs 920 and Rs 960, indicating further room for growth.
ITC: Buy | LTP: Rs 449 | Stop-Loss: Rs 440 | Target: Rs 465-470 | Return: 5 percent
The Bullish Engulfing candle formation on the daily chart, indicating a potential bullish reversal. Positive divergence is observed on the daily chart, confirming strength and a potential reversal. The stock has crossed above its 20-day moving average (20DMA) on strong trading volumes and has exceeded the high of the previous two days.
Key support is evident at Rs 440 levels, providing a solid foundation for potential upward movement. The stock's potential upside targets are set at Rs 465 and Rs 470, indicating scope for further price appreciation.
RBL Bank: Buy | LTP: Rs 245 | Stop-Loss: Rs 239 | Targets: Rs 255-260 | Return: 6 percent
RBL Bank has experienced a symmetrical triangle breakout on the daily chart, indicating a surge in optimism. The stock has maintained its position above a critical moving average.
Furthermore, the stock's RSI (relative strength index) is showing a bullish crossover. On the upper side, it has the potential to move towards Rs 260. On the lower side, support is situated at Rs 239.
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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