The Nifty last week surpassed the crucial resistance of 18,096, which happened to be the previous swing top on weekly charts. It has also taken out the resistance derived from the downward sloping trend line, adjoining weekly highs of October 22 and September 16. Last week's close was the all-time-high close on a weekly basis. November and December have been good for equity markets if we were to go by the historical seasonal charts performance of last 29 years.
The dollar index and bond yields in the US have seen a bearish trend reversal and the same is expected to auger well for world equity and bullion markets. The MSCI emerging market index has reversed north from the long-term trend line support and the same would support the bullishness in the Indian market.
The Nifty is placed above all important moving averages, which indicates bullish trend on all time frames. Indicators and oscillators have been showing strength on daily and weekly time frames. ADX (average directional index) has been rising on Nifty daily chart, which indicates rising momentum in the current uptrend.
The Nifty has also surpassed the neckline resistance of the bullish Inverted Head and Shoulder pattern on the weekly chart, which projects the healthy upside for the Nifty in the Medium to long term.
The benchmark index has strong support at recent swing low of 17,969 and unless it closes below that trend will remain bullish for the short term. Near term resistance is seen at an all-time high placed at 18,604 odd levels.
Considering the evidences discussed above, we advise traders to utilize dips to accumulate longs. We expect the Nifty to register new all-time high above 18,604 in the short term and go beyond.
Here are three buy calls for next 2-3 weeks:
RPG Life Sciences: Buy | LTP: Rs 975 | Stop-Loss Rs 918 | Targets: Rs 1,090-1,170 | Return: 20 percent
The stock price has broken out from the bullish inverted Head and Shoulder pattern on the monthly chart. Indicators and oscillators like RSI (relative strength index) and MACD (moving average convergence and divergence) have been showing strength in the current uptrend. Volumes have been rising along with the price rise.
JK Paper: Buy | LTP: Rs 422 | Stop-Loss: Rs 391 | Targets: Rs 460-486 | Return: 15 percent
The stock price has been forming higher tops and higher bottoms on the daily chart. It is placed above all important moving averages, indicating bullish trend on all time frames.
Indicators and oscillators like DMI (directional movement index), MACD and RSI have turned bullish on daily chart. Paper stocks have been outperforming for last couple of months and sector has been holding strength on medium to long term charts.
Happiest Minds Technologies: Buy | LTP: Rs 998 | Stop-Loss: Rs 920 | Targets: Rs 1,090-1,150 | Return: 15 percent
On November 11, the stock price broke out from the downward sloping trend line with jump in volumes on the daily chart. It has been consolidating in narrow range with thin volumes for last many weeks.
Recent price move has given some indication of the bullish momentum, as stock surpassed its 200 days EMA (exponential moving average) resistance during the intraday session of November 14, 2022. It has closed above its 50 days EMA resistance.
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