Nandish Shah, Senior Derivative & Technical Analyst at HDFC Securities
Nifty surged 383 points or 2.17 percent on April 4 to close at its highest level since January 18 on the back of surge in the banking stocks after the HDFC-HDFC Bank merger announcement. This is the highest daily percentage gain since February 25.
Last week, the Nifty had broken out from the downward sloping trendline adjoining the highs of January 17 and March 23. Moreover, it closed above the previous swing high of 17,441, indicating that Nifty was in strong uptrend. Primary trend of the Nifty remains positive as it is placed above its 50, 100 and 200 day EMA (exponential moving average).
Momentum oscillators RSI (relative strength index) is showing strength as it has witnessed breakout from the downward sloping trendline on the daily chart.
In the Index Futures segment FIIs have created fresh longs during the last few days as their net long to short ratio has moved up to 2.45 level from 0.61 levels on March 8. In the Option segment, we have seen aggressive Put writing at 17,500 levels. This level also coincides with the 11-day EMA which is placed around 17,450 levels. Therefore, we believe that short term trend will remain bullish till Nifty is trading above 17,500 levels.
Nifty Midcap and Smallcap indices have also broken out from the downward sloping trendline. We expect mid-cap/small-cap stocks to do well for the coming weeks. Focus of the traders should be on the Midcaps to generate higher returns from hereon we believe.
To conclude, we believe that short-term trend of the Nifty is positive and Nifty is headed towards all-time high levels. Immediate target for Nifty is seen around 18,350 levels, followed by 18,600 levels. Longs should be protected with stop-loss of 17,500 levels.
Among sectors, PSU Banks, NBFCs, Metal and Technology are likely to outperform for the coming weeks.
Here are three buy calls for the next 2-3 weeks:
HG Infra Engineering: Buy | LTP: Rs 602 | Stop-Loss: Rs 570 | Target: Rs 670 | Return: 11 percent
The stock price has broken out from the symmetrical triangle on the daily chart with higher volumes. Stock price is trading above its all-important short and medium-term moving averages. Plus DI (directional indicator) is trading above Minus DI while ADX (average directional index) line has started sloping upwards, indicating stock price is likely to gather momentum in the coming days.
Momentum Oscillators RSI is showing strength in the current uptrend of the stock. Infra stocks are looking good on the charts for the medium term.
Graphite India: Buy | LTP: Rs 542 | Stop-Loss: Rs 515 | Target: Rs 600 | Return: 11 percent
The stock price has broken out from the symmetrical triangle on the daily chart with higher volumes. Stock price has also broken out on the daily chart with higher volumes where it closed at highest level since February 2, 2022.
Momentum Oscillator like RSI has witnessed trendline breakout indicates higher possibility of a sharp rise in the prices in the coming days.
HSIL: Buy | LTP: Rs 321 | Stop-Loss: Rs 300 | Target: Rs 355 | Return: 11 percent
Stock price has broken out on the daily chart with higher volumes where it closes at highest level since March 16, 2022. Stock price is on the verge of breaking out from the symmetrical triangle.
Primary trend of the stock is positive as it is trading above its 100 and 200 day EMA. Oscillators like RSI and MFI (money flow index) are showing strength in the current uptrend of the stock.
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.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
