Nifty for the past 2 weeks has been moving higher after bouncing off the 14,467-mark.
On the daily timeframe, we can see that the index has been in a range for the last 6 sessions, moving between 14,862 and 15,273. The index remains above the long-term moving averages of 50, 100 and 200-day SMA.
The RSI, moving higher on the short- and medium-term timeframe, indicates the presence of bullish momentum in the index.
Based on the above parameters, the index seems to be moving higher and seems to have started the next phase of upside.
On the upside, the key resistance level is 15,273 (the upper range of the consolidation). If the index sustains above this level, we might see the index heading higher towards 15,650 (1 percent extension level of the rise from 13,131-14,753.5 projected form 13,596) and eventually towards 15,910 (78.6 percent extension level of the rise from 13,596-15,431 projected from 14,467).
The key support levels to watch for in the short term are 14,862 (lower range of the 6-day consolidation), followed by 14,467 (recent swing low).
Currently, the index is in a range and is moving between 15,273 and 14,862.
Looking at the technical multiple timeframe charts and the technical parameters, we expect the index to break out from the range and move higher towards 15,650, followed by 15,910.
The above analysis will not hold the trend if the index breaches and closes below the 14,862-mark. If this level is breached, we might see the correction continuing towards 14,467.
Here are three buy calls for the next 3-4 weeks:
IRCTC | LTP: Rs 2,018.50 | Target price: Rs 2,293 | Stop loss: Rs 1,870 | Upside: 14%
IRCTC has been forming a higher high higher low pattern since January. On March 5, the stock broke and sustained above Rs 1,994 (February 25, 2020 high) which happens to be a lifetime high of the stock.
The RSI plotted on the medium and short timeframe can be seen placed above the 50-mark and moving higher, indicating that the bulls are in control.
On the daily timeframe, we can see the stock has been witnessing a cap in the up move after rallying from Rs 1,865-2,073.
Going ahead, we can expect the prices to move higher towards Rs 2,202, followed by Rs 2,293.
The key support levels are Rs 1,927 and 1,870. One can buy the stock at current levels and add on dips till Rs 1,927 for target of Rs 2,202, followed by Rs 2,293 with a strict stop loss at Rs 1,870 on a closing basis.
Mindtree | LTP: Rs 1,892.45 | Target price: Rs 2,107 | Stop loss: Rs 1,715 | Upside: 11%
This stock has been forming a higher high higher low pattern for the last two weeks after bouncing off Rs 1,550-level. This up move is backed by above-average volume, indicating participation as the prices move higher.
A simple bar chart analysis of the weekly and the daily timeframe shows that the stock is currently in a strong bullish mode.
The MACD plotted on the weekly timeframe can be seen placed above the zero line and can be seen rising as the prices move higher, indicating bullishness in the trend. The RSI plotted on the 50 mark indicates expanding momentum in the bullish trend.
The long-term moving averages on the daily timeframe are as follows: 50-day SMA (Rs 1,705), 100-day SMA (Rs 1,555) the 200-day SMA (Rs 1,335).
Currently, the prices are trading above all the long-term moving averages.
The resistance is placed at Rs 1,988, followed by Rs 2,107. The key level to watch out for on the downside are Rs 1,800, followed by Rs 1,715.
One can buy the stock at current levels (Rs 1,892) and add on dips till Rs 1,800 for the target of Rs 1,988, followed by Rs 2,107 with a strict stop loss of Rs 1,715 on a closing basis.
Can Fin Homes | LTP: Rs 562.10 | Target price: Rs 634 | Stop loss: Rs 113 | Upside: 13%
In the current week, Can Fin Homes broke out of the 12-week consolidation.
On March 10, the stock broke above the Rs 557.50-mark for the first time since March 2018. This up move is backed by above-average volumes, indicating participation as the prices break above a multi-month resistance level.
The MACD plotted on the weekly timeframe can be seen placed above the zero line and can be seen rising as the prices move higher indicating bullishness in trend.
The RSI plotted on the 50-mark indicates expanding momentum in the bullish trend.
Going ahead, immediate resistance is placed at Rs 591, followed by Rs 634 and eventually towards Rs 690. The key support levels are Rs 536 and Rs 500.
One can buy the stock at the current level and add on dips till Rs 536 with a target of Rs 591, followed by Rs 634 and eventually Rs 690 with a strict stop loss of Rs 113 on a closing basis.
(The author is a technical analyst, GEPL Capital)
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