The Nifty remained in a 76-point range on June 26 and repeatedly climbed and declined before closing mildly in the positive. It did not follow through on the downside after the bearish formation of a dark cloud cover on the weekly charts. The turnover remained on the lower side and it was the lowest in the NSE since April 24 for the cash segment.
The Nifty has never closed below its 20-day EMA (exponential moving average) support since March 31. At present 20-day EMA for Nifty is placed at 18,645. Previous swing low on the daily chart is placed at 18,555.
The Nifty Smallcap Index is also placed above its 20-day EMA (10,523). On June 26, the index ended up forming a 'harami' candlestick pattern on the daily charts, which creates some chances of resuming the primary uptrend. However, confirmation will come by looking at the direction in which index opens on June 27.
The benchmark Nifty recently missed making a new all-time high by just 1 point. The important thing to note down here is the strong breadth in the current rally which started from April 2023.
Percentage of stocks above 200 DMA (days moving average) reached above 75 percent in the current rally which was higher than the reading of 68 percent in December 2022, when all time of 18,887 was registered. Positional longs should be held with stop-loss of 18,555.
Here are three buy calls for next 2-3 weeks:
Firstsource Solutions: Buy | LTP: Rs 128.50 | Stop-Loss: Rs 121 | Target: Rs 153 | Return: 19 percent
The stock price has been consolidating for last 7 consecutive weeks. On week ended May 12, the stock took out the crucial resistance of its previous top with jump in volumes.
The stock is placed above all important moving averages, indicating bullish trend on all time frames. Indicators and oscillators like MACD (moving average convergence divergence) and RSI (relative strength index) have turned bullish on its weekly charts.
The stock price has been holding higher tops and higher bottoms on weekly and monthly chart. Midcap IT as a sector has been outperforming and the same is expected to continue.
Mahindra Holidays & Resorts India: Buy | LTP: Rs 295 | Stop-Loss: Rs 268 | Targets: Rs 325-360 | Return: 22 percent
On week ended April 13, the stock broke out from downward sloping trendline on the weekly chart. On week ended May 26, it found support on the same trend line and reversed north.
The stock is placed above all important moving averages, indicating bullish trend on all time frames. Indicators and oscillators like MACD and RSI have turned bullish on its weekly charts. Hospitality as a sector has been outperforming for last many months.
Hikal: Buy | LTP: Rs 316.75 | Stop-Loss: Rs 301 | Target: Rs 342 | Return: 8 percent
On June 2, the stock broke out from the down trendline on the daily chart. Post breakout, the stock registered some gains and fell into running correction.
The stock is placed above strong support of its 100-day EMA. It is likely to resume its primary uptrend.
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