Vidnyan Sawant, AVP - Technical Research at GEPL Capital
On a weekly timeframe, the price action of the index has exhibited a pattern of lower highs and lower lows, indicating a negative sentiment prevailing in the market.
The current position of the index is at the 50 percent retracement level of the prior upward movement from 15,183 in June 2022 to 18,887 in December 2022. This indicates that the index is experiencing a bearish trend.
The prices have sustained below the 20-week SMA (simple moving average) confirming bearish undertone of the prices.
Momentum indicator RSI (relative strength index) on the Weekly timeframe is falling and have sustained well below the 50 mark reflects lack of positive momentum in the prices.
The resistance for the index are placed at the level of 17,250 (key resistance) and 17,530 (2-week high). The downside support for the index is placed at 16,828 (weekly low) below that 16,747 (swing low). We feel that the index may maintain a range of 16,747 – 17,530 levels.
Here are three buy calls for next 2-3 weeks:
SRF: Buy | LTP: Rs 2,383.70 | Stop-Loss: Rs 2,258 | Target: Rs 2,710 | Return: 13 percent
The stock of SRF has shown a stellar uptrend from March 2020 to January 2022, the correction post this uptrend has been done in a very refined way as the stock did not get into its lower high, lower low formation.
The recent breakout from the Inverse Head & Shoulder pattern indicates beginning of the trend to the upside.
Furthermore, the Bollinger bands on daily have opened with higher volumes suggest the rising volatility of the prices for an up move.
On the weekly timeframe, the relative strength index (RSI) has shown a breakout which reflects presence of positive momentum.
Moving forward, we expect prices to rise to the level of Rs 2,710 with a recommended stop-loss of Rs 2,258 on a closing basis.
KPIT Technologies: Buy | LTP: Rs 881.45 | Stop-Loss: Rs 835 | Target: Rs 1,000 | Return: 13 percent
KPIT Technologies is currently trading at its record high, this illustrates that the stock already is in strong momentum. The stock has already shown a breakout of the Cup & Handle pattern which indicated continuation of prior uptrend.
The prices have sustained well above its key moving averages of 50 & 200-day EMA (exponential moving average) which confirms the presence of prior uptrend.
RSI on the weekly as well as on the daily timeframe is above 50 mark reflecting presence of strong momentum.
Going ahead we expect the prices to move higher till the level of Rs 1,000 where the stop-loss must be Rs 835 on the closing basis.
NCC: Buy | LTP: Rs 105.95 | Stop-Loss: Rs 100 | Target: Rs 120 | Return: 13 percent
The stock price of NCC has surpassed a crucial level of Rs 102 which the prices respected since June 2019. This illustrates the positive undertone of the prices.
The stock has also broken out of a Rounding Bottom pattern on its weekly timeframe, indicating a continuation of its prior uptrend.
On the daily timeframe, the stock has been consistently trading near the upper Bollinger Band, indicating increased volatility.
Additionally, the RSI on the weekly timeframe has shown a range shift reflecting rising momentum in the prices.
In conclusion, based on these technical indicators, it is anticipated that the stock will continue to rise towards Rs 120 level with a suggested stop-loss at Rs 100 on a closing basis.
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