By Rupak De, senior technical analyst at LKP Securities
Nifty has dipped below its previous swing high on the daily chart, indicating a decline in bullish sentiment. Following a period of consolidation, the index experienced a correction, which could be considered an early indication of a bearish reversal.
Additionally, a negative crossover is evident on the daily RSI (relative strength index). In the short term, it is probable that the Nifty will fall towards the 19,700-19,630 range. Selling on rallies might remain a favourable strategy as long as the index remains below the 20,000 mark.
Meanwhile, the Bank Nifty index faced negative news related to HDFC Bank, which had a detrimental impact on the index's performance. As a result, selling pressure was observed throughout the trading day. The index breached the key support level of 46,000, which has now turned into a resistance level on the upside.
To resume the upward momentum, the index would need to close above this newly established resistance. The immediate downside support for the Bank Nifty stands at 45,300. This level is critical, and a break below it is expected to trigger further selling pressure in the direction of the 45,000 mark.
Here are three buy calls for next 2-3 weeks:
Punjab National Bank: Buy | LTP: Rs 76.33 | Stop-Loss: Rs 74 | Target: Rs 82 | Return: 7.4 percent
PNB continues to exhibit strength, maintaining a bullish setup. Furthermore, the stock has held above a crucial moving average. The RSI shows a bullish crossover as well. In the short term, it is possible that the stock will advance towards Rs 82. A support level is situated at Rs 74.
Coal India: Buy | LTP: Rs 284 | Stop-Loss: Rs 274 | Target: Rs 310 | Return: 9 percent
The stock has risen above the recent consolidation, suggesting a rise in optimism. Furthermore, the stock has held above a crucial moving average. The RSI shows a bullish crossover as well. In the short term, it is possible that the stock will advance towards Rs 310. A support level is situated at Rs 274.
Honeywell Automation: Buy | LTP: Rs 40,631 | Stop-Loss: Rs 39,500 | Targets: Rs 42,500-43,000 | Return: 6 percent
Honeywell Automation India has recently experienced a bullish breakout on the daily chart, accompanied by a surge in trading volumes. This breakout indicates a potential shift towards an upward trend. The stock has successfully surpassed the closing high of the previous five days, confirming a bullish undertone in its price movement. This suggests that buyers are active and driving the stock higher.
The Relative Strength Index (RSI) has given a breakout from a falling trendline, further confirming the presence of bullish momentum in the stock. RSI is a widely used momentum indicator in technical analysis.
Honeywell has a visible support level at Rs 39,000, which is expected to act as a price floor and provide support in case of any price retracement. The stock has potential upside targets in the range of Rs 42,500 to Rs 43,000, indicating the anticipated price levels to which the stock may rise in the near term.
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