Vidnyan Sawant, AVP - Technical Research at GEPL Capital
Since last seven weeks, the Nifty has been making lower top lower bottom formation and from previous five weeks, it has sustained below its 20 week SMA (simple moving average - 17,105) which shows bearish sentiments of the index. On the daily charts, the index has faced strong resistance at 16,400 levels since last 2 weeks indicating negative undertone of the market.
On the indicator front, the RSI (relative strength index) plotted on the weekly charts is sustaining below 40 mark which shows negative momentum.
The Nifty has immediate resistance placed at 16,400 and 16,800, followed by 17,105 levels. The downside support for the index is placed at 15,671 followed by 15,450 levels.
We feel that the Nifty is in a bearish mode. If the index breaches 15,671 levels, then it will move towards 15,450 mark in coming days. Our bearish view will be negated if it sustains above 17,105 levels.
Here are three buy calls for next 2-3 weeks:
Hindustan Aeronautics: Buy | LTP: Rs 1,685.75 | Stop-Loss: Rs 1,540 | Target: Rs 1,895 | Return: 12 percent
HAL has been moving in a Higher Top Higher Bottom formation since March 2020 on the weekly charts indicating bullish undertone of the stock. The stock is strongly outperformed the broader market.
We witnessed a volume pick up at every rise in a stock price which shows bullish undertone of the stock. On the daily charts, the stock has formed CIP formation (Change in Polarity) near Rs 1,480 levels and sustained above 20 days SMA (Rs 1,608) indicating positive strength of the stock.
On the indicator front, the RSI plotted on the daily time frame has sustained above 60 mark with a higher top higher bottom pattern, indicating increasing bullish momentum in the prices.
Going ahead, we expect prices to move at higher levels towards Rs 1,758, post which we might see a move towards Rs 1,895 levels. We recommend a stop-loss of Rs 1,540 on daily closing basis.
ITC: Buy | LTP: Rs 275.65 | Stop-Loss: Rs 252 | Target: Rs 322 | Return: 17 percent
ITC is giving a consolidation breakout which has been making since last six weeks and sustaining at multi-year high indicating positive undertone of the market. On the daily charts, the stock is forming big bullish candle with huge volume confirmation.
On the indicator front, the RSI plotted on all the time frame is sustaining above 60 levels which shows strong positive momentum.
Going ahead, we might see prices moving higher towards Rs 310 mark. If the prices manage to sustain above Rs 310 mark, we might see further up move towards Rs 322 level. We recommend a strict stop-loss of Rs 252 on daily closing basis.
MRPL: Buy | LTP: Rs 88.35 | Stop-Loss: Rs 68 | Target: Rs 115 | Return: 30 percent
Mangalore Refinery and Petrochemicals (MRPL) has bottomed out at Rs 40 levels with double bottom price formation and currently sustaining at multi-year high with strong volume support on the weekly charts.
On the daily charts, the stock has made CIP formation (Change in Polarity) at 68 levels. The stock is strongly outperformed the broader market.
The RSI indicator plotted on the weekly charts is moving upward and it is sustaining above 65 mark with the formation of higher low indicating strong positive momentum of the stock.
We expect the stock to move higher towards Rs 100 and if it managed to cross above Rs 110 then eventually it will move towards Rs 115 levels.
One should maintain a strict stop-loss of Rs 68 on daily closing basis for this trade.
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