For the last six trading sessions, Nifty has been locked in a small consolidation range between 14,600 and 14,900, respectively.
The index has been consolidating between the band of 21 and 50-day exponential moving averages on the daily interval.
Nifty and Bank Nifty, on April 7, opened flat and traded in a narrow range for the first initial hour. Later, after the announcement of unchanged repo and reverse repo rate from the RBI, the market traded in a higher high formation on the smaller timeframe and closed above 14,800.
Momentum oscillator RSI (14) is hovering within the 45-55 range and the MACD indicator is reading below its line of polarity on the daily chart.
Nifty, on the weekly chart, is locked within a rising channel pattern and is currently trading near the lower band of the rising channel pattern which will act as an important support zone in the weekly interval.
In the current scenario of the higher high higher bottom, prices are located just at the right junction from where it can take a U-turn.
On the upside, the key resistance level is 14,950. If the index sustains above this level, we might see it head higher above 15,200. The key support levels to watch out for in the short term are 14,550 and 14,400.
Here are two buy and one sell calls for the next 2-3 weeks:
SBI Cards and Payment Services | Buy | LTP: Rs 981.90 | Target price: Rs 1,045 | Stop loss: Rs 935 | Upside: 6%
This stock has been trading in a rising channel pattern on the weekly chart and is currently placed near the support of the lower band of the rising channel pattern.
Prices have retraced near 61.80 percent Fibonacci levels from their previous intermediate low which is an important support level for the counter.
It is trading above its 50 and 100-day exponential moving averages on weekly as well as monthly timeframes which is positive for the near term.
In terms of the candlestick, prices have formed a bullish harami pattern in the previous week and the current weekly formation suggests a bullish hammer pattern.
Bharti Airtel | Buy | LTP: Rs 541 | Target price: Rs 569 | Stop loss: Rs 525 | Upside: 5%
This stock, after a prolonged consolidation, has witnessed a falling channel pattern breakout on the daily timeframe and is currently trading above its trendline support.
It is trading above its 21, 50 and 100- day exponential moving averages on the daily timeframe which is positive for the near term.
There has been above-average volume set up for the past few days.
Momentum oscillator RSI (14) has given a horizontal trendline breakout which was placed at 40 levels. Currently, RSI is reading below 50 levels with a bearish crossover.
Mahindra & Mahindra | Sell | LTP: Rs 797.20 | Target price: Rs 755 | Stop loss: Rs 820 | Downside: 5%
This stock has witnessed a triangle pattern breakdown on the daily chart and is currently trading below its trendline resistance.
On April 7, it seems to have completed its pullback and trendline resistance will act as a strong hurdle for the prices.
The stock is trading below its 21 and 50- day exponential moving averages on the daily timeframe which is negative for the near term.
(The author is a technical analyst at Bonanza Portfolio)Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.