The Nifty witnessed a rush to book profits from the psychological resistance of 16,000 followed by a smart pullback from the 15,500 level. The structure is still bullish as the index trades above its 20-DMA (day moving average - 15,750). However, if the Nifty starts to trade below its 20-DMA, then bears will again become aggressive for a move towards 15,500-15,350 levels, otherwise we can expect a bounce towards 16,050-16,200 levels.
Bank Nifty was outperforming but 50-DMA acted as a resistance and it witnessed profit booking. However 20-DMA of 33,500 is an immediate support level. If it manages to hold its 20-DMA then we can expect a bounce back towards 34,000-34,500 levels, otherwise weakness may get an extension towards 33,000-32,500 levels.
Despite a pullback in the market, the long exposure of FIIs in the index future is below 15 percent, and the Put-Call ratio is also below 1 level, therefore the market is still waiting for a short-covering rally.
The rupee weakness is pushing bulls on the backfoot despite multiple attempts at lower levels, therefore market will have an eye on rupee movement along with FIIs' behaviour. The direction of the US market, crude oil, and dollar index will be other important triggers.
Here are three buy calls for next 2-3 weeks:
Siemens: Buy | LTP: Rs 2,560 | Stop-Loss: Rs 2,400 | Target: Rs 2,814 | Return: 10 percent
The counter is in a classical uptrend where it has witnessed a breakout of symmetrical triangle formation with strong volumes. The overall structure is very bullish as it trades above its all-important moving averages.
On the upside, Rs 2,650 is an immediate resistance area; above this, we can expect a run-up towards Rs 3,000+ levels in the near term. On the downside, Rs 2,400 is major support at any correction.
Mirza International: Buy | LTP: Rs 245 | Stop-Loss: Rs 225 | Target: Rs 284 | Return: 15 percent
The counter has a strong bullish setup where it is forming rising channel formation on the daily timeframe. It has retested its previous breakout level of Rs 190 after hitting a fresh 52-week high.
On the upside, Rs 270 is a susceptible area. Above this, we can expect a run-up towards Rs 290 level in the near term. On the downside, Rs 220 is major support at any correction.
Sumitomo Chemical India: Buy | LTP: Rs 466 | Stop-Loss: Rs 425 | Target: Rs 530 | Return: 14 percent
The counter is forming Cup & handle pattern formation on the daily chart. It also showed a V-shaped recovery from the 200-SMA which is placed around Rs 420 level.
Most of the momentum indicators are positively poised and indicate a further rally in this counter.
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