Following its peak at 19,992, the Nifty has displayed a consistent lower top pattern on its weekly charts over the past four weeks, reflecting profit-booking at higher levels.
The ongoing week has seen the formation of a Doji candle pattern, denoting a degree of uncertainty in the short term. Notably, the Nifty has been trading within a range defined by its 20-day SMA (simple moving average) at 19,645 and its 50-day SMA at 19,250, indicating a period of consolidation.
The relative strength index (RSI), a momentum indicator, has been declining and staying below the 50 mark on the daily charts. This indicates that the positive momentum for the Index is waning in the short term.
On the support side, the Nifty finds substantial backing at 19,234, which aligns with the low of the previous month. Below that, a critical support level exists at 18,887. As for potential resistance levels, the Index confronts hurdles at 19,645, corresponding to the high of the prior week, and at 19,992, representing the all-time high.
Given the prevailing conditions, the Nifty's trend in the short to medium term appears to be corrective, as long as it remains below the 19,645 level. This suggests the likelihood of corrective movement in the near future.
Here are three buy calls for next 2-3 weeks:
HUDCO: Buy | LTP: Rs 70.60 | Stop-Loss: Rs 57 | Target: Rs 90 | Return: 27 percent
The stock is currently experiencing a breakout that hasn't been seen in several years, marked by the formation of higher tops and higher bottoms. This pattern suggests a notably positive sentiment surrounding the stock. Examining the weekly charts, there has been a significant breakout in the form of a Cup and Handle pattern, supported by strong trading volumes. Notably, the stock's value revisited the breakout level, affirming the favourable trajectory of the stock.
Consistently, the stock has displayed a propensity to remain above its 20-day simple moving average (SMA), establishing itself as a reliable and steadfast support level. This consistent behaviour further reinforces the emerging upward trend of the stock's performance.
Adding to this optimistic outlook is the momentum oscillator, or the RSI, which indicates a favorable momentum by consistently staying above the 60 level. This suggests a promising continuation of the stock's upward movement from its current position.
Looking ahead, it's plausible to anticipate an upward movement in the stock's prices, potentially reaching a level of 90. It's advisable to set a stop-loss at Rs 57, based on daily closing prices, to mitigate potential losses.
Praj Industries: Buy | LTP: Rs 484 | Stop-Loss: Rs 440 | Target: Rs 560 | Return: 16 percent
Praj Industries stock has recently broken out of a consolidation pattern and achieved an all-time High, maintaining its position at this level. This breakout is supported by an increase in trading volume, indicating robust participation in the upward movement.
Analyzing the daily charts, the stock has also exhibited a Saucer pattern breakout and established a Change in Polarity (CIP) pattern around the 460 level, providing further confirmation of a strong upward trend.
Currently, the stock is trading favorably above its crucial 50-day and 200-day exponential moving averages (EMAs), underscoring the continuation of the upward trajectory.
Examining its momentum, the RSI indicator reflects a robust positive momentum, consistently holding above the 60 level across various timeframes such as daily, weekly, and monthly.
Looking ahead, there is an expectation that the stock's price will persist in its ascent until it reaches Rs 560 levels. It's advisable to implement a stop-loss at Rs 440, based on a closing basis.
Manappuram Finance: Buy | LTP: Rs 154 | Stop-Loss: Rs 131 | Target: Rs 185 | Return: 20 percent
Manappuram Finance is currently displaying a notable breakout from an Ascending Channel pattern, which has led it to reach 52-week high levels. This upturn signals a prevailing positive sentiment for the stock. Upon scrutinizing the daily charts, a Change in Polarity (CIP) pattern has taken shape around Rs 131 price point. This serves to reinforce the stock's bullish trajectory.
Additionally, a breakout from an Ascending Triangle pattern has been identified on the daily charts. This development further bolsters the optimistic outlook for the stock. The stock is also sustaining its position above crucial moving averages, namely the 50, 100, and 200-day simple moving averages (SMA). This convergence of moving averages underscores a strong bullish sentiment.
The weekly and daily (RSI) momentum indicators are both in an ascending mode, with values above the 60 level. This implies the existence of robust positive momentum in the stock's price movement.
Forecasts concerning price trends suggest that there is potential for the stock to ascend towards Rs 185 price mark. It's important to note that a prudent stop-loss level should be set at Rs 131, and this must be strictly observed based on closing prices.
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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