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Nifty has been consolidating for the last six weeks in a weekly closing range of 14,550-15,200.
On March 19, the index found support in the gap zone of 14,336-14,469 and registered a sharp recovery.
On the same day, Nifty formed a bullish piercing line candlestick pattern on the daily chart, indicating a short-term bullish reversal.
This week has started with a narrow move where Nifty has formed a small inside bar on the daily chart.
It is yet to form the lower bottom on the weekly line charts to confirm the downtrend. The lower top is already in place but the lower bottom is yet to be confirmed as Nifty is still maintaining its level above the previous bottom of 14,529 on the weekly closing basis.
Last week, Nifty found support on the upward sloping trendline on the weekly charts which indicates that the primary uptrend is still there.
Sectors with positive bias are FMCG, metal, energy and IT. Selective NBFC stocks also look good.
Indicators and oscillators like RSI, MACD and DMI have not been showing any sign of strength in the index.
They have been gradually weakening on the daily charts. However, unless prices break the crucial support, downward trend confirmation would not come.
So, it would be advisable to turn bearish only if Nifty breaks the 14,500 level. It is also wise to remain conservative at higher levels.
Buy on dips and sell on rallies kind of strategy has been working well for traders recently. Momentum and follow-ups are missing in the current trend of the market.
Mid-cap and small-cap indices are in an uptrend and likely to continue with their outperformance over Nifty.
Support for Nifty is seen at 14,500 and with that stop-loss, traders should remain bullish.
Resistance for Nifty is seen in the range of 15,000-15,100 range.
Here are three buy calls for the next 3-4 weeks:
Triveni Engineering and Industries | LTP: Rs 84.20 | Target price: Rs 97 | Stop loss: Rs 77 | Upside: 15%
This stock has corrected sharply from the recent high of Rs 97.80 to Rs 84.
The primary trend of the stock is bullish, as it broke out from the bullish inverted head and should pattern on the weekly charts in February and it still maintains a level above that.
The stock is expected to resume its primary uptrend as it has reached crucial neckline support.
The recent correction seems to be an opportunity to create fresh longs in the stock.
Sarda Energy Minerals | LTP: Rs 425 | Target price: Rs 470 | Stop loss: Rs 390 | Upside: 11%
The Nifty metal index has broken out from the bullish flag pattern on the daily chart.
This is one of the best performing mid-cap metal stocks which still looks convincing on the chart and can extend gains from the current levels.
In the week ended February 19, this stock broke out from the consolidation phase which held for the last 10 weeks.
Volume during the breakout was higher which confirms the breakout. Moving average and oscillator setup are bullish on daily and weekly charts.
Happiest Minds Technologies | LTP: Rs 538 | Target price: Rs 590 | Stop loss: Rs 500 | Upside: 10%
The midcap IT stock has been performing very well for the last couple of months. It has been consolidating in a narrow range for the last 5 consecutive weeks between a weekly closing range of Rs 530 and Rs 540.
In February, the stock broke out above the previous all-time high and closed the month with a big bull candle.
It has been trading above all important moving averages. Indicators and oscillators like RSI, MACD and DMI have turned bullish on the short-term charts.
(The author is a technical research analyst at HDFC 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.