The Nifty has recently displayed a lower-top-lower-bottom pattern on the weekly charts, marking the first occurrence of such a pattern since April 2023. This suggests that profit-booking has taken place after reaching life-high levels.
This week, the index is in the process of forming an 'inside week small body candle', indicating a certain level of uncertainty in the short term. Notably, the Nifty has been struggling to surpass its 20-day simple moving average (SMA) at 19,665 for the past seven days, signaling a lack of positive momentum.
The momentum indicator relative strength index (RSI) is in decline and remains below the 55 mark on the daily charts. This points to a weakening positive momentum for the Index in the short term.
On the support side, the index finds strong backing at 19,234, which corresponds to the previous month's low. This is followed by a key support level at 18,887. Looking towards potential resistance levels, the index faces challenges at 19,795, representing the previous week's high, and at 19,991, which marks the all-time high.
Given these conditions, the short to medium term trend of the Nifty Index seems to be corrective in nature as long as it remains below the 19,795 level. This indicates that the Index is likely to experience some corrective movement in the near future.
Here are three buy calls for next 2-3 weeks:
Emami: Buy | LTP: Rs 514 | Stop-Loss: Rs 490 | Target: Rs 570 | Return: 11 percent
The stock is currently hovering near its all-time high, indicating a powerful momentum in its price. Notably, on August 8th, 2023, the stock displayed a rising gap, which can be identified as a Runaway Gap, a further testament to its strength.
Consistently, the stock has shown a tendency to stay above 12-day exponential moving average (EMA), solidifying its role as a consistent and dependable support level. This behavior underscores the emerging upward trend.
Further supporting this bullish sentiment is the momentum oscillator, MACD (moving average convergence divergence), which showcases a positive crossover above the baseline. This suggests a potential continued uptrend in the stock's price from its current position.
Going further we can expect the stock prices to move higher till the level of Rs 570 where the stop-loss must be Rs 490 on the Daily Closing basis.
KPR Mill: Buy | LTP: Rs 661.45 | Stop-Loss: Rs 630 | Target: Rs 740 | Return: 12 percent
After undergoing a correction from January 2022, KPR Mill stock successfully established a solid foundation in the range of Rs 485 to Rs 615.
Recently, the stock experienced an upward shift after retesting the rectangle pattern observed in early June 2023. Currently, the stock is favourably trading above its critical 50-day and 200-day EMAs, indicating the continuation of the upward trend.
In terms of momentum, the MACD indicator presents a robust position well above its neutral line, underscoring the persistent bullish momentum of the stock.
Looking forward, we anticipate that the stock prices will continue to climb until they reach the level of Rs 740. At this point, a stop-loss should be implemented at Rs 630 on a closing basis.
JSW Steel: Buy | LTP: Rs 831.5 | Stop-Loss: Rs 770 | Target: Rs 940 | Return: 13 percent
JSW Steel is currently experiencing a significant breakout, reaching Life High levels. This indicates a strong positive sentiment in the market. Analyzing the weekly charts, the stock has established a change in polarity (CIP) pattern around Rs 770 price level, reinforcing its bullish trend.
Furthermore, the daily charts reveal a consolidation breakout, which adds further weight to the positive outlook for the stock. The stock is also maintaining its position above key moving averages, including the 50, 100, and 200-day simple moving averages (SMA). This alignment of moving averages indicates robust bullish sentiment.
Both the Weekly and Daily relative strength index (RSI) momentum indicators are on the rise and holding above the 60 level. This suggests the presence of strong positive momentum in the stock's movement.
Anticipated price movement suggests that the stock has potential to rise towards Rs 940 price level. It's important to note that a prudent stop-loss level should be set at Rs 770, and this must be strictly observed based on closing prices.
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