Last Week, the Nifty hit a high of 17,428, which happens to be the 50 percent retracement level of the entire down swing seen from the recent high of 18,096 to the recent low of 16,747. Despite recovery, the index has not done enough yet to consider itself totally out of the woods. For a bullish confirmation, the index has to surpass 50 percent (17,422) and 61.8 percent (17,582) retracement of the entire downswing.
On the downside, there is a strong support around 16,900 levels, which is derived from 200 days EMA (exponential moving average). Index has been holding above the weekly upward sloping trend line, which adjoins the major swing lows of March 2020 and June 2022.
At present, trend-line support is placed at 16,600 odd levels and same can act as a far support. Any level below 16,600 would result in to bearish breakout for the medium term in Nifty.
Nifty Midcap and Smallcap indices have been holding strength on the charts and we may continue to see stock specific bullish moves in the coming days.
To conclude, we expect Nifty to remain in to congestion zone of 16,900-17,425. We don’t expect any directional move in the benchmark indices for the short term.
Buying on dips and selling on rallies strategy is advisable for traders for the coming week. A level below 16,900 or level above 17,425 would decide directional move for the Nifty and till then traders should expect consolidation in the benchmark indices.
Here are three buy calls for next 2-3 weeks:
RPG Life Sciences: Buy | LTP: Rs 793 | Stop-Loss: Rs 731 | Targets: Rs 870-920 | Return: 10-16 percent
On September 30, the stock surged more than 10 percent with jump in volumes. Stock price has broken out on weekly, monthly and quarterly charts.
Primary trend of the stock has been bullish with higher tops and higher bottoms. It is placed above all important moving averages.
For last few sessions, it has been consolidating with low volumes. However, considering the primary bullish trend, recent consolidation in the stock should be utilized to initiate fresh longs.
Krishna Institute of Medical Sciences: Buy | LTP: Rs 1,470 | Stop-Loss: Rs 1,350 | Targets: Rs 1,670-1,770 | Return: 14-20 percent
On week ended September 30, 2022, the stock broke out from the down ward sloping trend line on the weekly chart and also registered new all-time high of Rs 1,574 with significant jump in volumes.
After running correction, it has turned north, which can be considered as retracement of the primary bullish trend. Volumes have gone up along with the price rise, while during price falls volume remained less.
Indicators and oscillators like MACD (moving average convergence and divergence) and RSI have turned bullish on the weekly charts. Stock is placed above all important moving averages, indicating bullish trend on all time frames.
Pfizer: Buy | LTP: Rs 4,452 | Stop-Loss: Rs 4,300 | Targets: Rs 4,725-4,900 | Return: 6-10 percent
The stock price has surpassed crucial resistance of its 200 days EMA and has been sustaining above it. Stock has also broken out from the consolidation, which held for previous 7 months.
Indicators and oscillators have turned bullish on the daily and weekly charts. Pharma sector has started outperforming and the same is expected to continue.
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