Vidnyan Sawant, AVP - Technical Research at GEPL Capital
The recent low of 16,828.35 in the Nifty50 aligns closely with the lows observed in September and October 2022, thereby making it a significant level of support to monitor going forward.
On the weekly timeframe, the Nifty has closed above the prior week's high, forming a higher high and higher low pattern. This upward momentum was observed after a bounce from the 50 percent Fibonacci retracement level, which was calculated based on the prior advance from 15,183.40 in June 2022 to the high of 18,887.60 in December 2022.
On the daily time frame, the prices have sustained well above the key moving averages of 50 & 200-day EMA (exponential moving average).
The index has strong support at 17,563 (20-week SMA) followed by 17,312 (key support). While on the higher side, the mark of 18,000 (psychological level) followed by 18,200 (key resistance) are crucial levels to watch out for.
The index has displayed impressive resilience following a recent low, and our expectations are for the momentum to persist until reaching 18,000, with potential for further gains towards 18,200. This positive outlook is contingent upon the index maintaining support above 17,563, which serves as a crucial level to safeguard against downward movement.
Here are three buy calls for the next 2-3 weeks:
DLF: Buy | LTP: Rs 413 | Stop-Loss: Rs 395 | Target: Rs 470 | Return: 14 percent
The stock of DLF has shown impressive resilience, consistently maintaining a level above Rs 286, a threshold that was breached for the first time post-March 2013. This sustained performance has been observed since early June 2021, illustrating a significant strength.
The recent breakout from the Rectangle pattern has indicated a continuation of the prior uptrend.
The stock on the daily timeframe has shown a golden Crossover between the 50 & 200-day EMA confirming the beginning of the trend to the upside.
The RSI on the weekly timeframe has shown a breakout reflecting positive momentum.
Going ahead we expect the prices to move higher to Rs 470 where the stop-loss must be Rs 395 on the closing basis.
Eicher Motors: Buy | LTP: Rs 3,213 | Stop-Loss: Rs 3,040 | Target: Rs 3,360 | Return: 5 percent
The stock has shown a change in the polarity at the bearish trend line which the prices respected since September 2017, this illustrates the positive undertone of the prices.
The stock has recently shown a breakout of the falling wedge pattern which indicates a continuation of the prior uptrend.
The prices have sustained well above their key moving averages of 50, 100 & 200-day EMA which confirms the presence of a prior uptrend.
Additionally, the RSI on the daily timeframe as well as on the weekly timeframe has sustained well above the 50 mark reflecting the presence of positive momentum.
Going ahead we expect the prices to move higher till the level of Rs 3,360 where the stop-loss must be Rs 3,040 on the closing basis.
JB Chemicals and Pharmaceuticals: Buy | LTP: Rs 2,165.90 | Stop-Loss: Rs 2,020 | Target: Rs 2,400 | Return: 11 percent
The stock price is currently trading near its life-high which tells that the stock already is in strong momentum.
The recent breakout of the bearish slope confirms continuation of the prior uptrend, which was preceded by the retest of the rectangle pattern.
On the daily timeframe, the stock has been consistently trading near the upper Bollinger Band, indicating increased volatility.
Additionally, the RSI on the Weekly timeframe has shown a breakout too which reflects the presence of strong momentum.
In conclusion, based on these technical indicators, it is anticipated that the stock will continue to rise towards Rs 2,400 level with a suggested stop-loss at Rs 2,020 on a closing basis.
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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