The Nifty continued its upward journey for the third session in a row backed by strength in realty, technology and consumer durable stocks on September 12.
On the weekly chart, the index broke out last week from a downward sloping trend line, adjoining the highs of 2021 and 2022. The Nifty is placed above its 20, 50, 100 and 200 days EMA (exponential moving average) on the daily chart, which indicate a bullish trend on all time frames.
Weekly RSI (relative strength index - 11) for the Nifty is placed around 60 mark which is still far from overbought zone, which indicates room for more upside. Daily ADX (average directional index - 10) has been rising and placed at 35, below the extreme momentum levels. With upward sloping ADX and +DI (directional indicator) placed above –DI on the daily chart, we can expect Nifty to extend the gains from the current levels.
In the Option segment, aggressive Put writing was seen at 17,500-17,600 levels. This level also coincides with the swing low of 17,485 registered on September 7. Therefore, our advice is to continue to remain bullish with the trailing stop-loss of 17,500 levels. On the higher side, Nifty could move towards an immediate resistance of 18,100 and 18,350 levels.
Nifty Midcap and Smallcap indices have outperformed the Nifty by gaining by 2.7 percent and 4.7 percent as compared to 1 percent rise in the Nifty till now in the September month. We expect their outperformance to continue for the coming weeks.
Here are three buy calls for next 3-4 weeks:
Navneet Education: Buy | LTP: Rs 146.5 | Stop-Loss: Rs 136 | Target: Rs 158-165 | Return: 13 percent
The stock price has broken out on the daily chart with higher volumes to close at highest level since April 2018. Primary trend of the stock is positive as it is trading above its 50, 100 and 200 days EMA.
Momentum Oscillators – RSI (11) and MFI (money flow index - 10) have placed above 60 on the daily chart and sloping upwards, indicating strength in the current uptrend of the stock. One can buy the stock in the range of Rs 146.5-142.
Engineers India: Buy | LTP: Rs 70.9 | Stop-Loss: Rs 65 | Target: Rs 78-82 | Return: 15 percent
The stock price has broken out from the Inverse Head and Shoulder pattern on the weekly chart. Stock price took support at 200 days EMA multiple times before breaking out on the daily chart on September 5 with higher volumes.
Plus DI is trading above minus DI while ADX line is placed above 25, indicating momentum in the current uptrend. One can buy the stock in the range of Rs 71-68.
Equitas Holdings: Buy | LTP: Rs 105.2 | Stop-Loss: Rs 96 | Target: Rs 115-120 | Return: 14 percent
The stock price is on the verge of breaking out from the downward sloping trendline on the weekly chart. Short term trend of the stock is positive as it is trading above its 5, 20 and 50 day EMA.
Oscillators like RSI (11) and MFI(10) are placed above 60, indicating strength in the current uptrend. Plus DI is trading above minus DI while ADX line is placed above 25, indicating stock price is likely to gather momentum in the coming days.
One can buy the stock in the range of Rs 105-100.
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