Pravesh Gour, Senior Technical Analyst at Swastika Investmart
The Nifty (at 17,656.35 as of the October 25 close) faces resistance near 17,800 after a strong bounce-back from its 200-day moving average (DMA). However, 17,500 is the immediate and strong support level, which is the 50-DMA. The put base is also placed at 17,500 ahead of the monthly F&O expiry in October. Below this level, 17,400-17,300 is the next demand zone.
On the upside, if the Nifty manages to sustain above the 17,800 level, then 18,000 will be the next hurdle.
The Nifty Bank index (41,122.75) is outperforming, but may find resistance close to its lifetime high at 41,500-42,000. On the downside, 40,800-40,500 is a support zone, followed by 40,000-39,700. If it manages to cross 42,000, a move towards 42,500-43,000 can be expected.
The headline index may consolidate with some volatility ahead of the F&O expiration, but sector- and stock-specific outperformance will continue.
The markets will continue to keep an eye on the direction of the global markets, the dollar index, US bond yields, and crude oil prices. On the domestic front, Q2 earnings are an important trigger.
Here are three buy calls for the next 2-3 weeks:
MCX India: Buy | LTP: Rs 1,495 | Stop-Loss: Rs 1,350 | Target: Rs 1,800 | Return: 20 percent
The counter has broken out of a bullish double-bottom pattern on the longer time frame, while on the daily chart, it has broken out of a bullish inverse head & shoulder pattern with huge volumes. The counter’s overall structure is very lucrative as it trades above all its key moving averages.
On the upper side, the immediate resistance level is Rs 1,520. Above this, a big move to Rs 1,800+ can be expected in the shorter time frame.
On the downside, Rs 1,400-1,350 is the demand zone for any correction.
The momentum indicator RSI (relative strength index) is positively poised, whereas the MACD (moving average convergence divergence) supports the current strength.
Seshasayee Paper and Boards: Buy | LTP: Rs 311 | Stop-Loss: Rs 285 | Target: Rs 360 | return: 16 percent
The counter is in a classical uptrend, with its higher highs and higher lows forming an ascending triangle with decent volumes on the daily chart. The structure of the counter is very bullish and it is trading above all moving averages.
An investor can take a position at the current level of Rs 310 with a stop-loss of Rs 285 for a target of Rs 340-360 in the near term.
Ramky Infrastructure: Buy | LTP: Rs 267 | Stop-Loss: Rs 235| Target: Rs 314 | Return: 18 percent
The counter has broken out of a bullish inverse head & shoulder pattern with strong volumes on the daily chart as well as a W-pattern on the longer time frame. The overall formation of the counter is very classical and it is trading above all important moving averages with a positive bias in momentum indicators.
The neckline resistance is at Rs 272-274, above which a rally to Rs 314 levels can be expected. For any correction, there is strong support at Rs 235.
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