Despite being a truncated week ended on April 13, the bulls added another 1.30 percent to their kitty on a week-on-week basis. With this, prices have comfortably closed above the March swing high of 17,800. This is a very positive development because the prices have broken above a major swing high for the first time in this calendar year.
From a technical perspective, there is a ‘rounding bottom’ formation visible on the daily time frame chart, which augurs well for the bulls. In addition, if we observe the weekly chart, we can see a fresh 'buy' signal in the RSI (relative strength index) smoothened with its signal line. This indicates a continuation of up-move in the near term.
One should avoid being complacent as this recent up-move has been very steep without any breather and hence, some in-between pause or mild profit-booking cannot be ruled out. Hence, traders should prefer to take some money off the table at higher levels, whereas, in case of any dips, one should use it as an opportunity to add bullish bets.
With the continuous nine-day winning streak, the support level continues to shift higher as we now see immediate support in the zone of 17,700 - 17,600; whereas 200-SMA around 17,500 is likely to act as a sacrosanct level. On the flip side, the next set of resistance is likely at the psychological level of 18,000, followed by the next swing high of 18,137.
Here are two buy calls for short term:
Welspun Corp: Buy | LTP: Rs 220 | Stop-Loss: Rs 207 | Target: Rs 230-234 | Return: 6.5 percent
Welspun Corp has seen good buying traction in the last two trading weeks and has formed a double bottom formation on the daily chart, signifying positive development in the counter.
On a technical aspect, the stock has witnessed a sloping trendline breakout on the daily and weekly time frame, adding to the bullish quotient. The stock looks well verse to continue its upwards journey in the comparable period.
Hence, we recommend buying Welspun Corp around Rs 215-218, with a stop-loss of Rs 207 and target of Rs 230-234.
KEC International: Buy | LTP: Rs 485.50 | Stop-Loss: Rs 462 | Target: Rs 505-510 | Return: 5 percent
KEC has witnessed a strong move in the last week and has surged above the cluster of its EMAs (exponential moving averages) on the daily chart.
The stock has recently seen some buying traction and emerged above the sloping trendline on the daily time frame, adding to a bullish quotient. The primary technical indicators align with the trend suggesting a continuation in the movement in a comparable period.
Hence, we recommend buying KEC at around Rs 480-485 with a stop-loss of Rs 462 and for a target of Rs 505-510.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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