The Nifty 50 closed with just a 0.53 percent loss on December 22 near 21,350. Although this marked the end of a seven-week winning streak, the closing doesn’t suggest any major setback, portraying it as a breather after a recent marathon run.
The bounce from lower levels indicates strong support around the 21,000 - 20,950 zone, which is technically significant with a bullish gap on the daily chart. Going ahead, this zone may act as an immediate base, and only a break below it could trigger a market correction.
On the positive side, the Nifty tested the 200 percent reciprocal retracement in the October fall to around 21,600, considered a pattern target. After -testing this level, a broad-based profit-booking occurred on Wednesday. Cautious traders are advised to remain vigilant around this zone, suggesting potential market tentativeness at higher levels.
Despite a positive undertone, the market appears to be in a corridor of uncertainty, and trading within the mentioned broad range is expected in the truncated week ahead of the next calendar year. Traders are cautioned to monitor these levels and adjust their trading strategies accordingly.
Here is one buy call and one sell call for short term:
Wipro: Buy | LTP: Rs 462.65 | Stop-Loss: Rs 433 | Target: Rs 498 | Return: 7.6 percent
The entire IT space is on a roll in the recent past and in fact, it provided the much-needed helping hand on Friday to maintain the sturdy posture of our benchmark index. Wipro has been participating with less conviction but on Friday, we witnessed first sign of real strength in the counter.
Pricewise, the daily chart exhibits a massive upsurge with gargantuan volumes to come out of the long slumber phase. With this development, Wipro has confirmed a breakout from 16 months consolidation phase to trigger a new leg of the rally.
We recommend buying on a decline around Rs 456 for a trading target of Rs 498. The stop-loss can be placed at Rs 433.
Grasim Industries: Sell | LTP: Rs 2,046.20 | Stop-Loss: Rs 2,097 | Target: Rs 1,990 | Return: 3 percent
This counter has been in a strong multi-year bull run for the last few years. Although the major undertone remains bullish, we are observing some signs of fatigue at higher levels. Taking a glance at the daily time frame chart, we can see prices sliding below the ’20-day EMA’ (exponential moving average) for the first time in recent past.
With this, the weekly chart now depicts a ‘Bearish Engulfing’ pattern, indicating some weakness in the near term. Taking all these evidences in mind, traders can look to short around Rs 2,060 for a near-term target of Rs 1,990. The strict stop-loss needs to be placed at Rs 2,097.
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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