The Nifty witnessed a smart recovery from its 20-DMA (daily moving average) and formed a Bullish Piercing line candlestick pattern on the daily chart which is suggesting a strong grip of bulls. On the upside, 9-DMA of 17,700 will be an immediate hurdle and if Nifty manages to cross this level then we can expect a fresh move towards 18,000-18,100 zone.
On the downside, if the Nifty slips below its 20-DMA of 17,350 then there is a possibility of a move towards a 200-DMA of 17,000.
Bank Nifty outperformed and formed a Bullish Engulfing candlestick formation at 20-DMA, however, 39,000 will be an immediate and important hurdle; above this, we can expect a move towards the psychological 40,000 mark.
On the downside, 38,000 is an immediate support. If it slips below this level then we can expect a move towards 37,200-36,800 levels.
If we talk about the derivative data ahead of F&O expiry then PCR (Put Call Ratio) is sitting at 1 level and positions of FIIs are not indicating much bearishness. If we look at open interest distribution, 17,500 looks like strong support while 18,000 is a key hurdle as 18,000 Call strike is holding higher open interest.
Global cues are important where world equity markets are eying the speech of the US Fed chairman Jerome Powell at Jackson Hole. Apart from that, the US dollar index, crude oil prices, and China-Taiwan-related news will keep busy global equity markets.
Here are three buy calls for next 2-3 weeks:
Vinyl Chemicals (India): Buy | LTP: Rs 378 | Stop-Loss: Rs 337 | Target: Rs 464 | Return: 22 percent
The counter is in a classical uptrend and it has witnessed a breakout of an ascending triangle formation to resume its uptrend. The breakout coincides with rising volume and it manages to sustain above breakout level despite weakness in the broader market.
It is trading above its all-important moving averages with a positive bias in momentum indicators. On the downside, Rs 356 level will act as a strong support level, below this Rs 337 is the next support level.
It is respecting its 20-DMA beautifully which is a classic sign of trend strength.
Welspun Corp: Buy | LTP: Rs 234 | Stop-Loss: Rs 207 | Target: Rs 284 | Return: 21 percent
The counter is witnessing multiple bullish setups where we can see a breakout of symmetrical triangle formation along with a breakout of a bullish Cup and Handle formation. It is building a strong base in a cluster of 20, 50 and 100-DMA.
On an immediate basis, Rs 240 is the horizontal resistance line; above this, we can expect a rally towards Rs 280 levels.
On the downside, Rs 207 is immediate and strong support. Momentum indicators are positively poised to support the current strength of the trend.
Kalyan Jewellers India: Buy | LTP: Rs 77.35 | Stop-Loss: Rs 68 | Target: Rs 94 | Return: 21 percent
In Tuesday's trading session, the counter witnessed a long-term downsloping trendline resistance with heavy volume and managed to close above 6 months swing high. There is a breakout of Bullish Flag formation in a shorter time frame that generates further momentum.
On the upside, Rs 84 is an immediate hurdle, above this, we can expect a move towards Rs 94.
On the Downside, Rs 69 is a strong demand level at any pullback. Momentum indicators are supporting the current strength of the trend.
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