After ten consecutive green candles, Nifty closed with a marginal loss of 53 points, or 0.38 percent, on January 6.
On Wednesday, an intraday dip got bought this near the support of 50 percent retracement from its previous intermediate low.
On the weekly chart, the prices have moved up in the unchartered territory. Also, the prices have managed to move above 50-day EMA on the weekly chart, indicating a bullish trend in the price.
Weekly RSI has moved above the previous swing high, which again is an indication of increased bullishness.
Daily RSI (14) continues to settle above its bullish range-shift zone and is currently reading well above 70 levels with bullish crossover.
The market continues to trend higher as bulls are not considering loosening their grip in the short-term.
Going forward, the trend in Nifty may remain bullish to sideways. On the higher end, the rally may extend towards 14,350.
On the lower end, support is placed at 13,900. In Bank Nifty, prices have successfully neglected its prior couple of weeks' bearish hanging man candlestick pattern on the weekly timeframe.
Failure of the bearish candle in its next couple of weeks indicates a strong ongoing bull market where every dip should be used as a buying opportunity in both the major Indices.
Going forward, the trend in Bank Nifty may remain bullish, on the higher end rally may extend towards its previous life high of 32,600. On the lower end support is placed at 30,800.
Here are three buy calls for the next 2-3 weeks:
The stock is likely to continue trading above its triangle pattern on the weekly timeframe. Recent trendline support is acting as a strong anchor point for the prices.
The recent leg of strong up-move is also supported by strong volumes and it also resembles a strong consolidation breakout.
After a minor correction in the previous week, the stock managed to close above its 50 and 100-week exponential moving averages on the weekly chart.
Momentum oscillator RSI (14) has witnessed a trendline breakout above 55 levels and is currently reading above 62 levels with positive crossover on the cards.
On the weekly chart, the MACD indicator is above zero level with positive crossover.
Gujarat Ambuja Exports | LTP: Rs 139.30 | Target price: Rs 152 | Stop loss: Rs 132 | Upside: 9%
A recent spurt in prices has scooped this stock above its horizontal trendline resistance on the daily timeline.
The counter has also witnessed a classic rectangle pattern breakout on the daily timeline.
The rectangle pattern normally acts as a continuous pattern after a prolonged consolidation.
A spurt in prices has made the stock settle above its 50 & 100-day exponential moving averages on the daily timeframe, which is a positive sign for the stock.
Momentum oscillator RSI (14) has settled in the range of 50 to 70, which is a bullish range shift for the indicator on the daily chart.
On the weekly chart, the stock is trading in higher high higher low formation which confirms the continuation of the uptrend.
Havells India | LTP: Rs 943.40 | Target price: Rs 1,010 | Stop loss: Rs 907 | Upside: 7%
This stock on daily charts has witnessed a smaller degree horizontal trendline breakout above Rs 925 levels.
Oscillators and momentum indicators like RSI and MACD are showing strength in the stock on the weekly as well as daily charts.
The stock is trading above its 20, 50, and 100-day exponential moving averages on the daily interval which is a bullish sign for the prices.
Follow-up buying was witnessed in the month of December with good volumes, which confirms the primary uptrend.
(The author is a technical analyst at Bonanza Portfolio)
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