Santosh Meena, Head of Research, Swastika Investmart Ltd
The Nifty is trying to respect its 20-WEMA (weekly exponential moving average) after a sharp sell-off in previous trading sessions at 17,222 level, however, the overall texture is still weak and the benchmark is vulnerable to fall at any pullback till it doesn't cross the 17,800 level decisively.
The Nifty has witnessed the breakdown of neckline support of 17,600 following a bearish head-and-shoulder formation. Therefore, 17,600 will act as an immediate hurdle and, above this, we can expect some short-covering move towards 17,800 level, while the bearish view will be negated above the 17,800 mark.
On the downside, if the Nifty slips below the swing low of 17,216 then 100-DMA (daily moving average) will be the next critical support that may coincide with the 17,100 level; below this, the major weakness is expected towards the 16,700 level. If we look at the momentum indicator RSI (relative strength index) then it is trading near support of 40 on the daily chart and 60 on the weekly chart. Therefore, we see some pullback in the market.
Here are three buy calls for next 2-3 weeks:
SpiceJet: Buy | LTP: Rs 84.45 | Stop Loss: Rs 79 | Target: Rs 94 | Return: 11 percent
The counter is witnessing a breakout of a classical ascending triangle formation with a sharp rise in volume. It is trading above its all-important moving averages where it attracts a strong demand during a small pullback in a cluster of moving averages.
Rs 90-94 is an immediate resistance area, however, it may head towards the next horizontal resistance of Rs 108. Momentum indicators RSI and ADX (average directional index) are positively poised where RSI is in little overbought territory on the daily chart but it has more scope on a weekly chart.
Mahindra Logistics: Buy | LTP: Rs 738.10 | Stop Loss: Rs 690 | Target: Rs 820 | Return: 11 percent
The counter is in a strong uptrend and outperforming the overall market where it is bouncing back from its 100-DMA with a bullish pin bar candlestick pattern. On a weekly time frame, it is likely to give a breakout of the bullish flag formation to resume its uptrend.
RSI is holding above the 50 mark, whereas MACD is also trading above the centreline. ADX is still flat and it has to move above the 25 mark to support the strength of the current uptrend.
BSE Limited: Buy | LTP: Rs 1,600.15 | Stop Loss: Rs 1,470 | Target: Rs 1,825 | Return: 14 percent
It is also in a strong uptrend where it is continuing its bullish momentum with a breakout of a bullish cup-and-handle pattern. Breakout level of Rs 1,470 will act as immediate support while rising 20-DMA will be major support at any pullback.
It has relative strength to the Nifty Midcap index while momentum indicators RSI and ADX are also positively poised.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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