Despite the correction, the Nifty has maintained a higher top and higher bottom formation, making an Inside Week candle pattern in the latest week, indicating range-bound movement of the index. However, on the daily charts, the index faces resistance at higher levels and has formed a lower top and lower bottom pattern, signalling short-term profit-booking at higher levels.
Critical technical indicators, particularly the relative strength index (RSI), continue to show some positive momentum, maintaining levels above 60 on weekly and monthly intervals. However, the RSI on the daily timeframe has dipped below the 55 level, indicating a lack of positive momentum in the short term.
Looking ahead, immediate resistance levels for the Nifty are identified at 22,055, with an additional hurdle at 22,230, representing the Fibonacci Extension level. On the downside, crucial support levels lie at 21,430 and 21,130.
Considering the overall chart structure, there is an anticipation of short-term rangebound sentiments. The recommendation is to consider buying at support near the 21,500 – 21,450 zone, targeting an upside potential ranging from 21,900 to 22,055 levels. It is advised to implement a strict stop-loss at 21,430 on a closing basis to effectively manage risks.
Here are three buy calls for next 2-3 weeks:
Canara Bank: Buy | LTP: Rs 569 | Stop-Loss: Rs 520 | Target: Rs 710 | Return: 25 percent
Canara Bank is currently trading at its highest levels in several years, indicating strong and resilient momentum in the market. Since hitting a low point in March 2020, the stock has shown impressive structural development, consistently forming higher highs and higher lows. This pattern aligns with a classical uptrend, highlighting a robust price structure.
Additionally, Canara Bank continues to maintain its position above both the 13-week and 34-week exponential moving averages (EMAs), further reinforcing the bullish trend. The RSI has consistently remained above the 65 level across daily, weekly, and monthly charts, indicating substantial momentum backing the trend's strength.
Volume analysis also supports the bullish sentiment, with volume increasing during upward price movements and decreasing during corrections. This suggests strong participation in the upward momentum from market participants.
Looking ahead, there is an expectation of continued price appreciation towards Rs 710 mark. It is advisable to set a stop-loss at Rs 520, strictly based on closing prices, to manage risk effectively.
The New India Assurance Company: Buy | LTP: Rs 304 | Stop-Loss: Rs 270 | Target: Rs 375 | Return: 23 percent
NIACL is currently trading near its multi-year high, indicating strong momentum in the market. The stock has consistently exhibited higher highs and higher lows, initially breaking out from a Double Bottom bullish pattern. More recently, it experienced another breakout from a Bullish Flag pattern, which signifies a consolidation of the previous rally. This breakout was accompanied by a notable surge in volume, exceeding the 10-week average, indicating a continuation of the upward trend.
Moreover, the stock's minor retracement found support near the 13-week average, demonstrating a mean reversion. The subsequent rally in the current week further confirms the continuation of the trend.
In addition, the RSI has displayed a positive signal, rebounding upwards from a trend line established since 2021. This strengthens the bullish momentum and suggests a favourable outlook for NIACL in the current market conditions.
Looking forward, we anticipate further upward movement in prices, with a target set at Rs 375. It is advisable to set a stop-loss at Rs 270 based on closing values to manage potential risks effectively.
Max Healthcare Institute: Buy | LTP: Rs 862 | Stop-Loss: Rs 800 | Target: Rs 1,015 | Return: 18 percent
Max Healthcare Institute has recently embarked on a bullish surge, supported by a series of technical confirmations. The stock has consistently been forming higher highs and higher lows, indicating a sustained upward momentum. Particularly noteworthy is the significant structural development where the swing high of June 2023 now serves as a support level, showcasing the stock's resilience.
Moreover, Max Healthcare Institute confidently trades above important moving averages, including the 13-week and 34-week EMAs. This alignment with the moving averages not only reinforces the positive momentum but also boosts confidence in the stock's continuous upward trajectory.
The bullish sentiment is further validated by indicators such as the Relative Strength Index (RSI), which is trending upwards and holding above the 65 level, highlighting the strength of the positive momentum.
Looking forward, we anticipate continued upward movement in prices, with a target set at Rs 1,015. To manage potential risks effectively, it is recommended to set a stop-loss at Rs 800 based on closing values.
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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