Nifty has been in a strong uptrend from 8,000 levels as shown by higher high and higher low (Dow Theory).
It made a high of about 11,800 and then witnessed a dip toward 11,185. It was followed by a bounce to 11,600 odd levels after which a fall to 10,800 was seen.
Thus, on daily charts, the index has now formed a lower high lower low which implies the index has entered into a downtrend.
The benchmark index bounced from 10,800 to current levels of 11,300 where daily Ichimoku Kijun is placed which can act as a hurdle on an immediate basis.
Nifty will have to cross the previous swing high of 11,620 for the current downtrend to negate. Based on this theory Nifty can retest 10,900/10,700/10,500 levels where daily cloud support is placed.
Generally, the Dow Theory doesn’t give a target so one can look at Fibonacci levels to arrive at one.
Here are three buy calls for the next 3-4 weeks:
Torrent Pharmaceuticals | Buy | LTP: Rs 2,706.95 | Target price: Rs 3,100 | Stop loss: Rs 2,570 | Upside: 15%
The stock has been in a strong uptrend and has shown an interesting pattern.
It has been consolidating in a range and then a breakout is seen. After a while, it retests the breakout area which is then followed by a fresh upside.
The stock is currently retesting the breakout area and is looking ripe for a strong bounce. It’s also taking support from 89-DMA.
Heikin Ashi candle charts show a potential trend change that supports our postulate of further upside in the stock.
One can buy the stock at Rs 2,650-2,700 for the targets of Rs 3,000-3,100 with a stop loss of Rs 2,570.
Info Edge India | Buy | LTP: Rs 3,633.45 | Target price: Rs 4,100 | Stop loss: Rs 3,400 | Upside: 13%
This has been one of the best performing mid-cap stocks. It is enjoying a strong uptrend and has been giving multiple breakouts with volumes.
The stock is currently trading above the Ichimoku cloud on daily charts which implies the trend remains strong.
The stock has witnessed another breakout from a rectangle pattern with an uptick in volumes.
One can buy the stock around Rs 3,600-3,650 for the targets of Rs 3,900-4,100 with a stop loss of Rs 3,400.
Hero MotoCorp | Buy | LTP: Rs 3,176.90 | Target price: Rs 3,500 | Stop loss: Rs 3,050 | Upside: 10%
This has been one of the consistent performers in the Nifty Auto index.
The stock witnessed a strong breakout above Rs 2,850 levels on the daily charts. It was seen retesting the breakout level in September after which it witnessed a strong bounce.
The stock is now giving fresh breakout on the daily charts with a rise in volumes. The stock is trading above the Ichimoku cloud on daily charts which implies the trend remains strong.
One can buy the stock at Rs 3,190-3,200 for a target of Rs 3,500 with a stop loss of Rs 3,050.
(The author is VP-Technicals and Derivatives, LKP Securities)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.