Vidnyan Sawant, AVP - Technical Research at GEPL Capital
On a weekly timeframe, the price action of the index has exhibited a pattern of lower highs and lower lows, indicating a negative sentiment prevailing in the market.
The current position of the index is below the 50 percent retracement level of the prior upward movement from 15,183 in June 2022 to 18,887 in December 2022. This indicates that the index is experiencing a bearish trend.
The 20-week simple moving average has transitioned from a strong support level to a resistance level, adding to the negative outlook.
Momentum indicator RSI (relative strength index) on the weekly timeframe is falling and has sustained well below the 50 mark reflecting a lack of positive momentum in the prices.
The resistance for the index is placed at the 17,529 level (weekly high), followed by 17,958 (20-day SMA). The downside support for the index is placed at 16,747 (swing low) and below that at 16,500 (key support).
We feel that the index still has a weakness, which can drag it lower to 16,747 followed by 16,500.
Here are three buy calls for next 2-3 weeks:
Petronet LNG: Buy | LTP: Rs 238 | Stop-Loss: Rs 230 | Target: Rs 272 | Return: 14 percent
Petronet LNG has broken through a bearish trendline that has been in place since September 2019, indicating a shift towards an upward trend and a reversal of the prior downtrend.
The breakout from the Double Bottom pattern in recent weeks indicates the beginning of the trend to the upside.
Furthermore, the Bollinger bands on daily have opened with higher volumes suggesting the rising volatility of the prices for an up move.
On the weekly timeframe, the relative strength index (RSI) has shown a breakout which reflects the presence of positive momentum. Moving forward, we expect prices to rise to the level of Rs 272 with a recommended stop-loss of Rs 230 on a closing basis.
GMR Airports Infrastructure: Buy | LTP: Rs 41.75 | Stop-Loss: Rs 38 | Target: Rs 48 | Return: 15 percent
The stock has shown a stellar uptrend from March 2020 to January 2022, the correction post this uptrend has been done in a very refined way as the stock did not get into its lower high, lower low formation.
The stock in the latest week broke out Descending Triangle pattern, signalling the beginning of the trend to the upside.
The prices have sustained above the upper Bollinger band, which points towards the rising volatility of the prices.
RSI on the weekly as well as on the daily timeframe is above the 50 mark reflecting the presence of strong momentum.
Going ahead we expect the prices to move higher till the level of Rs 48 where the stop-loss must be Rs 38 on the closing basis.
KPR Mill: Buy | LTP: Rs 600.30 | Stop-Loss: Rs 550 | Target: Rs 700 | Return: 16 percent
KPR Mill, which has shown a bullish trend since March 2020, has recently undergone a correction but has not fallen below the 38.20 percent Fibonacci retracement level of the previous upward movement. This suggests a positive sentiment and potential for further upward movement.
The stock has also broken out of a Descending Triangle pattern on its weekly timeframe, indicating a continuation of its prior uptrend.
On the daily timeframe, the stock has been consistently trading near the upper Bollinger Band, indicating increased volatility. Additionally, the RSI on the weekly timeframe has shown a range shift reflecting rising momentum in the prices.
In conclusion, based on these technical indicators, it is anticipated that the stock will continue to rise towards Rs 700 level with a suggested stop-loss at Rs 550 on a closing basis.
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