The benchmark Nifty continued to put up a strong bullish undertone, characterised by consistent higher-top-higher-bottom formations, notably seen on the monthly chart, where it has once again set a new milestone at 22,775, indicating enduring positive sentiment for the long term.
On the weekly charts, the index displayed mean reversion from the 13-week EMA (exponential moving average) before continuing to form higher highs and higher lows for three consecutive weeks.
Moreover, a breakout of the cup-and-handle pattern on the daily charts propelled the index to reach its life high, signalling the continuity of the bullish momentum. Key technical indicators, including the relative strength index (RSI), are showing optimistic readings above 60 across daily, weekly, and monthly time frames, indicating favourable momentum conditions.
In terms of levels, immediate resistance is seen at 22,900, followed by further resistance at 23,170 and 23,400. Conversely, crucial support levels are seen at 22,500 and 22,300.
Considering the current chart patterns, a prolonged bullish phase is anticipated for the longer term. Therefore, it is advisable to seek buying opportunities at the current level, with potential upside targets ranging from 22,900 to 23,400. To effectively manage risk, implementing a strict stop-loss strategy at 22,300 on a closing basis is recommended.
Here are three buy calls for the next 2-3 weeks:
Data Patterns: Buy | LTP: Rs 3,007 | Stop-Loss: Rs 2,760 | Target: Rs 3,600 | Return: 20 percent
On a weekly scale, Data Patterns has seen in an upward channel with consistent higher-highs and higher-lows, indicating strong momentum.
It has consistently stayed above the key moving averages like the 20-weekly and 50-weekly, confirming a positive trend. Notably, the stock has demonstrated resilience by bouncing off the 50-weekly EMA, showcasing effective mean reversion. Additionally, the MACD (moving average convergence divergence) indicator rising in positive territory reinforces the bullish momentum.
Comparing Data Patterns against the Nifty on a ratio chart reveals a breakout of prior swings, indicating outperformance and suggesting continued strength relative to the broader market index.
Going ahead, we expect the prices to go higher till the level of Rs 3,600. The bullish view will be negated if we see prices sustaining below Rs 2,760 level.
Bharat Electronics: Buy | LTP: Rs 228.75 | Stop-Loss: Rs 213 | Target: Rs 270 | Return: 18 percent
Bharat Electronics (BEL) is currently reaching its highest point ever, showcasing strong momentum in its price structure since 2020.
BEL continues to stay above significant moving averages like the 20-week and 50-week EMAs, signaling a positive trend. The RSI consistently remains above 60 across different timeframes, reinforcing the bullish momentum.
Additionally, the ratio chart of BEL against the Nifty demonstrates sustained outperformance as the ratio line continues to ascend.
Going ahead, we expect the prices to go higher till the level of Rs 270. The bullish view will be negated if we see prices sustaining below Rs 213 level.
Petronet LNG: Buy | LTP: Rs 302.5 | Stop-Loss: Rs 278 | Target: Rs 364 | Return: 20 percent
Petronet LNG has recently shown a robust price structure. After consolidating from 2017 to 2024, the stock has retested the breakout level of January 2024, suggesting a potential upward trajectory.
On a daily scale, it has rebounded from a double bottom formation and broken out of the March 2023 swing high, aligning with the higher timeframe trend.
Additionally, Petronet LNG is currently trading above key moving averages like the 12-week and 26-week EMAs, indicating an improvement in trend. The RSI above 60 and bullish crossovers further confirm the positive momentum.
Looking ahead, it's reasonable to anticipate continued upward movement in the stock, with a potential target price of 364. It's advisable to set a stop-loss at 278 on a closing basis to manage risk effectively.
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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