As long as Nifty trades below 12,150, the probability of retesting the lows of 11,800 remains high. Some relief for bulls can be expected on a close above 12,250.
Bulls on the Street took a pause due to the geopolitical tensions between the US and Iran.
The session of January 8 was a super volatile one for the benchmark index which opened more than 100 points lower, following the global clues but witnessed sharp recovery in the second half of the trading session.
A gap-down opening on January 6 had forced Nifty to break its falling wedge pattern on the daily chart. Generally, after the breakdown of such a bearish reversal pattern, prices normally face selling pressure in further trading sessions.
The index has broken its 21-day exponential moving average which is placed around 12,125 and is likely to form a bearish candle on the weekly chart ahead of the weekly expiry.
As long as the index trades below 12,150, the probability of retesting the lows of 11,800 remains high. Some relief for bulls can be expected on a close above 12,250.
Overall, the market, at the current stage, is definitely reacting sharply to the US and Iran news, so prices are not respecting any technical and fundamental levels. But certainly, this situation will be short-lived and the market will be back to normal soon.
Here are three buy calls for the next 3-4 weeks:
Phillips Carbon Black | Buy | LTP: Rs 125.15 | Target: Rs 137 | Stop loss: Rs 119 | Upside: 9.46%
After consolidating in a narrow range of Rs 105 - 125, the stock has witnessed a breakout above its downward sloping trendline which is placed at 122.85 level on the daily timeline.
Overall structure looks positive as of now as prices are trading above its 21, 50 and 100-day exponential moving averages.
Momentum oscillator RSI 14 on the weekly chart has given breakout above its horizontal trendline and is currently reading above 50 level with positive crossover.
Jubilant Foodworks | Buy | LTP: Rs 1,731 | Target: Rs 1,880 | Stop loss: Rs 1,640 | Upside: 8.60%
On the Weekly chart, Jubilant Foodworks has given a breakout above its eight-week consolidation range, which is placed around Rs 1,696 levels which is a positive indication for the future.
Moreover, prices are trading above its 50 and 100-day simple moving averages, which is positive for the counter in the medium-term on the weekly time frame.
Momentum oscillator RSI 14 on the monthly chart has formed a double bottom pattern and is currently reading above 65 levels with positive crossover.
The RSI 14 reading is suggesting a reversal in trend from bearish to bullish as the indicator reversed from 50 levels with a positive divergence.
DCB Bank | Buy | LTP: Rs 188.40 | Target: Rs 205 | Stop loss: Rs 179 | Upside: 9%
After a prolonged correction, the stock has given a falling wedge pattern breakout on the daily interval. The stock has retraced almost 78.60 percent which is placed at Rs 163 from a low of Rs 139.85 to a high of Rs 244.65.
Momentum oscillator RSI 14 has rebounded from 35 levels and Is currently reading near 50 level on the weekly chart.
(The author is a Technical Analyst at Bonanza Portfolio)Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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