Rajesh Palviya, VP - Technical and Derivative Research, Axis Securities
Nifty opened with an upward gap and witnessed selling in the initial hour on November 25. However, the buying momentum at 17,350 levels pulled the index higher to close near the day’s high.
The daily price action has formed a bullish candle and remained consolidated within 17,600-17,350 levels. Any sustainable move above 17,600 levels may cause an upside momentum towards 17,700-17,800 levels.
On the flip side, 17,500-17,400 levels are likely to act as a support zone. The Nifty is trading below 20-day and 50-day SMA (simple moving average) representing near-term bearish bias.
One should use any pullback towards 17,700-17,800 levels as a selling opportunity with a stop loss at 17,850. The daily strength indicator RSI (relative strength index) has turned bearish, indicating weakness ahead.
Here are three ‘buy’ calls for next 2-3 weeks
Reliance Industries: Buy | LTP: Rs 2,492.95 | Stop Loss: Rs 2,350 | Target: Rs 2,620-2,750 | Return: 5.1-10.3 percent
On the daily chart, the stock has rebounded very sharply from its 100-day SMA (Rs 2,350) along with a huge volume spurt indicating increased participation near the support zone.
This buying was observed from its one-year breakout zone of Rs 2,340-2,300 levels which remains a major support zone.
On the weekly and monthly chart, the stock continued to scale upward forming a series of higher tops and bottoms representing sustained uptrend.
United Spirits: Buy | LTP: Rs 942.35 | Stop Loss: Rs 898 | Target: Rs 1,000-1,080 | Return: 6.1-14.6 percent
The stock is in a strong uptrend forming a series of higher tops and bottoms across all the time frames indicating sustained up trend. It is well placed and holding its past four-month Up-sloping Trendline support at Rs 910 on a closing basis which reconfirms bullish sentiments.
The stock also managed to sustain above its 20, 50 and 100-day SMAs indicating a bullish momentum. The daily strength indicator RSI has witnessed positive crossover which signals upside momentum in the near term.
PI Industries: Buy | LTP: Rs 2,997.80 | Stop Loss: Rs 2,860 | Target: Rs 3,150-3,230 | Return: 5.1-7.7 percent
Since the past three weeks, the stock managed to hold and sustain its 200-day SMA (Rs 2,762) which remains a positive sign. The stock has rebounded from its 200-day SMA support zone which signals buying interest near the major support zone.
With current close, the stock has gained 3 percent from its 20-day SMA support zone (Rs 2,864).
On the hourly and daily chart, the stock has observed a shift of trend towards upside indicating rising strength. The daily strength indicator RSI has witnessed positive crossover which signals upside momentum in the near term.
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