The Nifty recovered more than 400 points from the day's low to close at 16,794 on February 28 on the back of buying in metal, technology and oil & gas stocks. The short-term trend turned bullish as the Nifty managed to close above its five-day exponential moving average (EMA), placed at 16,790), for the first time after February 17.
The Nifty also closed above 200-day EMA placed at 16,720.
In the futures segment, foreign institutional investors created fresh longs on February 25, where their net long to short ratio moved to 1.60 level from 0.91.
In other words, out of their total positions in the Index Futures, 62 percent is on the long side and 38 percent on the short side.
In the options segment, we have seen aggressive Put writing at 16,400-16,500 levels. Therefore, we believe that short- term trend will remain bullish as long as the Nifty trades above 16,400.
Short-term oscillators like relative strength index (RSI) and money flow index (MFI) are showing strength, as they have witnessed breakout from the downward sloping trendline.
To conclude, the short-term trend turned positive for the Nifty. The immediate target is seen at around 17,100, followed by 17,600.
Longs should be protected with stop-loss of 16,400. Among sectors, IT, metal and FMCG are likely to outperform in the comings weeks.
Here are three buy calls for the next two-three weeks:
KPIT Technologies: Buy | LTP: Rs 568.5 | Stop-Loss: Rs 530 | Target: Rs 640 | Return: 12 percent
The primary trend of the stock is positive. It is trading above its 100 and 200- day EMA. The price has been taking support at 100-day EMA since July 2020. RSI and MFI oscillators are placed above 40 and rising upwards, indicating strength in the current uptrend.
Infosys: Buy | LTP: Rs 1,715.6 | Stop-Loss: Rs 1,660 | Target: Rs 1,850 | Return: 8 percent
The stock price has formed strong base by forming multiple bottoms around Rs 1,665 in the past six months. The short-term trend turned positive as it closed above its 5-day EMA.
The primary trend is positive as the stock is trading above its 200-day EMA. The price has corrected nearly 15 percent from the high, which we believe is a buying opportunity.
Jindal Stainless: Buy | LTP: Rs 194 | Stop-Loss: Rs 185 | Target: Rs 215 | Return: 11 percent
The stock price has broken out from the downward sloping trendline, adjoining the highs of February 8, 2022 and February 25, 2022. The short- term trend turned positive as the stock closed above its 5 and 10 day EMA.
Metals, as a sector, is looking good for the short to medium term. Oscillators like RSI and MFI are showing strength in the current uptrend of the stock.
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