The Nifty has exhibited some interesting price action recently. It found strong support around 19,230 levels, which was the previous month's low, and saw a significant rebound, indicating a robust demand at lower levels.
However, when we analyse the index on both weekly and daily charts, we observe mixed signals. On the weekly charts, the index has formed a higher-high-higher-low pattern, suggesting a bullish trend. But on the daily charts, it faced resistance at the 20-day simple moving average (SMA), and formed a bearish engulfing candle pattern in terms of its body, signalling selling pressure at higher levels. This discrepancy indicates uncertainty in the short to medium term.
The relative strength index (RSI), a momentum indicator, is declining and remains below the 50 mark on the daily charts. This implies a weakening positive momentum for the index in the short term.
In terms of support and resistance levels, the index has strong support at 19,234, corresponding to the previous month's low, with a key support level at 18,887 following closely. Potential resistance levels include 19,645, representing the high of the past three weeks, and 19,991, which is the all-time high.
Given these conditions, it appears that the Nifty Index is currently in a rangebound trend between 19,234 – 19,645 levels in the short to medium term, as long as it stays above the 19,234 levels. A breach of this immediate support could push it lower toward the 18,887 levels.
Here are three buy calls for next 2-3 weeks:
Mahindra Holidays and Resorts India: Buy | LTP: Rs 395.60 | Stop-Loss: Rs 380 | Target: Rs 440 | Return: 11 percent
Mahindra Holidays has been on a consistent ascent within its rising channel, marking continuous higher highs and higher lows, reflecting a bullish sentiment.
It's worth noting that the stock demonstrates a pronounced breakout from an Inverse Head & Shoulder pattern, hinting at a potential prolonged uptrend. This pattern is especially prominent near the channel's support level.
Additionally, the stock's prices have consistently positioned themselves above the 12-day exponential moving average (EMA) — a time-tested metric for dynamic support.
Reinforcing this optimistic view, the MACD (moving average convergence divergence) momentum indicator signals a range transition, accentuating the stock's burgeoning momentum.
Looking ahead, it's plausible to anticipate an upward movement in the stock's prices, potentially reaching a level of Rs 440. It's advisable to set a stop-loss at Rs 380 based on daily closing prices, to mitigate potential losses.
Sun TV Network: Buy | LTP: Rs 582.55 | Stop-Loss: Rs 560 | Target: Rs 660 | Return: 13 percent
The stock has witnessed a significant breakout from a multi-year resistance level, positioned around Rs 574 mark, a barrier that has held since October 2018. This upward shift is accompanied by heightened trading volume, pointing to strong investor interest in this surge.
On examining the daily charts, a Saucer pattern breakout further accentuates the stock's bullish potential, hinting at an intensified upward momentum.
In the present context, the stock maintains a positive stance above key metrics like the 12-day and 26-day EMAs, reinforcing the bullish narrative. When assessing momentum, the MACD indicator portrays a vibrant positive surge, marked by a favorable crossover above its baseline.
Looking ahead, there is an expectation that the stock's price will persist in its ascent until it reaches Rs 660 level. It's advisable to implement a stop-loss at Rs 560, based on a closing basis
Mphasis: Buy | LTP: Rs 2,464 | Stop-Loss: Rs 2,320 | Target: Rs 2,825 | Return: 14 percent
Mphasis stock is currently trading at its 52-week high, indicating a robust positive sentiment for the medium to long term. Additionally, recent market activity reveals a Bullish Flag pattern breakout with substantial trading volume confirmation, affirming an ongoing uptrend.
Moreover, the daily charts demonstrate a notable breakout from a consolidation pattern, providing further support for the stock's positive outlook. Notably, the stock has also undergone a Change in Polarity (CIP) around the 2220 price level, signifying a potential shift in its market dynamics.
Furthermore, both the weekly and daily RSI indicators are trending upwards and holding above the 65 level. This signals the presence of substantial positive momentum in the stock's price movement.
Based on these technical indicators, the expected price movement suggests that the stock has the potential to advance towards Rs 2,825 price level. To manage risk effectively, it's advisable to set a prudent stop-loss level at Rs 2,320 on closing basis.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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