By Rupak De, senior technical analyst at LKP Securities
Nifty exhibited volatility but achieved a significant milestone by closing above 19,600 for the first time in a while. The bullish crossover of the 21EMA (exponential moving average placed at 19,448) and 55EMA (19,292) has persisted, signaling an ongoing bullish trend. Additionally, a bullish crossover in the RSI (relative strength index) highlights the index's strength.
In the short term, Nifty may target levels of 19,750 or even 20,000. On the downside, key support rests at 19,440, and the market is expected to maintain a buy-on-dips strategy as long as this support level holds.
The banking sector witnessed choppy trading as traders struggled to find direction, resulting in heightened volatility for the Bank Nifty index. The prevailing sentiment leans towards a negative-to-sideways bias, with the index closing below a crucial moving average.
The RSI is on the verge of forming a bearish crossover, indicating potential weakness. In the short term, the index is expected to decline towards 44,000, with resistance at 44,600. Sustained trading above this level could propel the index towards 45,000 and beyond.
Selling on rallies seems to be the favoured strategy for traders in the Bank Nifty, unless the index provides a clear and decisive breakout above the 45,000 levels.
Here are three buy calls for next 2-3 weeks:
Bharti Airtel: Buy | LTP: Rs 880 | Stop-Loss: Rs 844 | Target: Rs 950 | Return: 8 percent
The stock recently broke out of a consolidation pattern on the daily chart, signaling an increasing bullish sentiment. It has also surpassed a critical moving average, further reinforcing the bullish outlook.
The RSI is in a bullish crossover, adding to the positive sentiment. In the short term, the stock is expected to target Rs 950, with support at Rs 844 providing potential downside protection.
Indian Hotels Company: Buy | LTP: Rs 431.5 | Stop-Loss: Rs 410 | Targets: Rs 465-475 | Return: 10 percent
Indian Hotels is displaying promising signs, with a strong range breakout and significant volume on the daily chart. The stock is trading above both its 200-day and 50-day moving averages, further reinforcing its bullish outlook.
A daily RSI of 72 signifies strong momentum. Traders may consider a long position between Rs 422-428 levels, with a strict stop-loss at Rs 410, targeting gains of Rs 465-475.
ITI: Buy | LTP: Rs 127.70 | Stop-Loss: Rs 119 | Target: Rs 145 | Return: 13.5 percent
ITI exhibits strong technical signals, including a breakout above falling trendlines on both daily and weekly charts with substantial volume support. It's also trading above its 50-day and 200-day moving averages.
The RSI at 70 indicates robust momentum. Consider a long position between Rs 125-127, with a tight stop-loss at Rs 119 (aligned with the 50-day moving average) and target of Rs 145 on the upside.
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