The Nifty index has been consistently showing an upward trajectory, characterised by the formation of higher tops and higher bottoms on monthly time frames. However, recent market dynamics have shown signs of potential exhaustion in the bullish sentiment, which was evident in the emergence of small-bodied candles at record high levels over the past two months, indicating reduced volatility.
On the weekly charts, although the Nifty achieved fresh life highs at 22,297 last week, it failed to sustain these levels and breached the previous week's low, signalling a lack of confidence among market participants at higher levels. Despite this, the overall trend for the Nifty remains positive for the medium to long term.
In the shorter term, specifically on the daily timeframe, the index has been trading within a narrow range of 21,800 to 22,300 levels for the past few days.
Key technical indicators such as the relative strength index (RSI) remained positive, with readings above 65 on weekly and monthly intervals. However, the daily RSI indicates a neutral momentum, hovering around the 50 mark.
Looking ahead, immediate resistance levels are seen at 22,300, representing the recent life high, with further resistance seen at 22,550. On the downside, crucial support levels are at 21,800 and 21,450.
Given the current chart structure, a consolidation phase is expected. It is recommended to consider buying near the support zone of 21,900 – 21,875, with potential upside targets ranging from 22,250 to 22,300 levels. To manage risks effectively, it is advisable to implement a strict stop-loss at 21,800 on a closing basis.
Here are three buy calls for next 2-3 weeks:
Intellect Design Arena: Buy | LTP: Rs 1,106 | Stop-Loss: Rs 1,040 | Target: Rs 1,309 | Return: 18 percent
Intellect is currently trading at its lifetime highs, indicating robust and resilient momentum in the stock. The stock has shown a strong structural development forming higher high and higher low pattern since March 2023, accompanied by a surge in volume above the 21-week average volume.
Moreover, stock maintains its position above both the 12-week and 26-week exponential moving averages (EMA), reinforcing the bullish trend. ADX (average directional index) study stood at 43 and +DI (directional indicator) is above 40 highlighting the strength of the trend supported by substantial momentum.
A noteworthy observation is the breakout of the sloping trend line in the ratio chart Intellect against Nifty. This development emphasizes the stock's robust strength and potential for sustained outperformance compared to the broader market.
Looking forward, there is an anticipation of further price ascent towards Rs 1,309 mark. It is recommended to set a stop-loss at Rs 1,040, strictly based on the closing basis.
Kalyan Jewellers India: Buy | LTP: Rs 397 | Stop-Loss: Rs 368 | Target: Rs 455 | Return: 15 percent
Kalyan Jewellers demonstrates a strong price structure characterized by a clear uptrend since June 2022, marked by higher highs and higher lows. The stock consistently finds support at the 12-week average, affirming the trend for potential upside.
Further momentum is supported by the RSI study, which remains above 60 across various timeframes, indicating sustained strength in the upward trajectory.
Additionally, the ratio chart of Kalyan Jewellers against the Nifty shows a continuous upward trend, suggesting ongoing outperformance compared to the broader market.
Going ahead, we expect the prices to go higher till the level of Rs 455, and the bullish view will be negated if we see prices sustaining below Rs 368 level.
Tata Communications: Buy | LTP: Rs 1,923 | Stop-Loss: Rs 1,761 | Target: Rs 2,240 | Return: 16 percent
Tata Communications demonstrates a strong price structure, marked by a significant change in polarity as the resistance from January 2022 now acts as support on multiple occasions, signaling a continuation of the upward trajectory.
The stock has broken out of a triangular pattern with a surge in volume surpassing the 21-week average volume, further confirming its bullish momentum. This structural narrative has been consistent since June 2022, indicating a robust uptrend.
Maintaining a position above the 12-week and 26-week averages reinforces the trend support, while a bullish crossover on the MACD (moving average convergence divergence) study in positive territory adds momentum to the ongoing upward trend.
Looking forward, there is an anticipation of further price ascent towards Rs 2,240 mark. It is recommended to set a stop-loss at Rs 1,761, strictly based on the closing basis.
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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