The Nifty 50 witnessed a significant decline as investors chose to take some money off the table on January 17, a day after the benchmark index scaled a record high of 22,124. Wednesday's profit-booking led the index to the 21-day exponential moving average (EMA), a crucial short-term moving average.
Sentiment could potentially deteriorate further if the Nifty drops below 21,550, where the 21-day EMA is placed. On the downside, a breach of 21,550 may result in the index descending towards 21,350. Conversely, on the upside, resistance is seen at 21,650.
Bank Nifty experienced a sharp decline on the back of a sell-off in the heavyweight HDFC Bank. The index fell sharply below the 38.20 percent Fibonacci retracement level of the previous leg of rally (from 43,230 to 48,347).
Additionally, the index retreated within the area of the previous swing high after a consolidation breakdown on the daily chart. The sentiment may remain weak, with immediate support at 45,900-45,930. A drop below 45,900 could potentially initiate a further correction towards 45,500. On the upside, resistance is identified at 46,350.
Here are three buy calls for short term:
Welspun Corp: Buy | LTP: Rs 570 | Stop-Loss: Rs 529 | Target: Rs 650 | Return: 14 percent
The stock has experienced a breakout from a descending consolidation pattern on the daily chart, indicating increased optimism. Furthermore, the stock has surpassed the crucial short-term moving average, signifying a positive trend.
The RSI (relative strength index) is also in a bullish crossover, adding to the positive indications. In the short term, there is a potential for the stock to move towards Rs 650. On the downside, the support is established at Rs 530.
L&T Finance Holdings: Buy | LTP: Rs 169.70 | Stop-Loss: Rs 160 | Target: Rs 185 | Return: 9 percent
L&T Finance exhibits a bullish trend with higher highs and higher lows, signaling an uptrend. The Wednesday's rebound from the 20-day moving average suggests strong support. The bullish crossover in the RSI adds to the positive outlook.
Traders may consider a long position within Rs 169-167 range, setting a stop-loss at Rs 160. Targets for this potential upswing are set at Rs 185, aligning with the current technical indicators.
Apollo Hospitals Enterprise: Buy | LTP: Rs 5,926 | Stop-Loss: Rs 5,750 | Target: Rs 6,500 | Return: 10 percent
Apollo Hospitals recently closed at a formidable resistance level of Rs 5,915, indicating potential bullish strength. Sustaining above the short-term 20-day moving average adds further support to the positive outlook.
The RSI's bullish crossover suggests increasing buying momentum. Traders may consider a long position within Rs 5,880-5,930 range, implementing a stop-loss at Rs 5,750. Upside target is set at Rs 6,500, aligning with current technical indicators.
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