Nifty opened with an upward gap and the selling pressure in the first half dragged the index. However, some buying support along at the lower levels recovered some of the earlier losses to close on a flat note. The daily price action has formed a bearish candle carrying lower shadow indicating buying support at lower levels.
The Nifty closed at 14,677.8 with a loss of 18.70 points (-0.13%) while BSE Sensex gained 41 points (+0.09%). Since the past 8-9 consecutive weeks, the index continues to consolidate in a narrow range 15,000-14,400 levels representing short term sideways trend. Any decisive breakout above this 15,000 levels on a closing basis may cause strength towards 15,200-15,250 levels.
On the daily chart, Nifty continues to hold its 100-day SMA (14,575) which acts as support on the short term charts. The next higher levels to be watched are around 14,750 levels. Any sustainable move above 14,750 levels may cause momentum towards 14,850-14,900 levels.
On the downside, any violation of an intraday support zone of 14,600 levels may cause profit booking towards 14,550-14,500 levels. The daily strength indicator RSI and the momentum indicator Stochastic both have turned bearish along with negative crossover which remains a negative bias.
Here is a list of three stocks recommended for next week:
Bata India: Buy at Rs 1,386 | Stop Loss: Rs 1,350 | Target: Rs 1,430-1,465
The stock has witnessed two weeks 'Consolidation Range' breakout around Rs 1,380 levels on a closing basis which signals strong comeback of bulls. This breakout is accompanied with a huge volume spurt which signals increased participation at the breakout zone. This buying was observed from 20-day SMA (Rs 1,340) which remains a crucial support zone in near term. The daily and weekly RSI continue to remain bullish which supports rising strength ahead.
Power Grid Corporation of India: Buy at Rs 229 | Stop Loss: Rs 216 | Target: Rs 242-260
The stock is in a strong up trend forming a series of higher Tops and higher Bottom formation across all the time frames which supports bullish sentiments. Also the stock is well placed above its 20, 50 and 100-Day SMA's which reconfirms strong uptrend. Rising volumes also signals stock is gaining strength on rallies.
HBL Power Systems: Buy at Rs 41 | Stop Loss: Rs 36 | Target: Rs 47-53
On the weekly chart, the stock has witnessed "Flag" formation breakout on a closing basis along with huge volumes. As this is a continuation pattern it signals the previous trend's resumption. This buying momentum was observed from the 50 and 100-day SMA (Rs 35) which remains a crucial support zone. The daily and weekly strength indicator RSI and the momentum indicator Stochastic both are in bullish mode which supports upside momentum.
Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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