By Pravesh Gour, senior technical analyst at Swastika Investmart
The Nifty index has approached its lower trading range after a recent correction from its record high. Since the beginning of 2024, the index has exhibited a sideways consolidation pattern. Despite current volatility and downward pressure, a potential buying opportunity exists if Nifty can hold above its previous low of 21,777.
A successful defense of this level could trigger a recovery. On the upside, the 22,200-22,400 zone presents a potential resistance area. If Nifty can overcome this hurdle, a short-covering rally might ensue. Conversely, a breach below 21,777 could lead to further selling pressure, pushing the index towards 21,550 and even 21,200.
The Bank Nifty index experienced a sharp decline after failing to surpass the psychological barrier of 50,000. Currently, it finds itself hovering near its crucial 100-day moving average (DMA) at around 47,200. If the index can maintain this support level, a potential rebound is in sight.
The initial hurdle on the upside would be the 20-DMA, positioned around 48,200. A breakout above this level could trigger short covering, propelling the index towards 48,600 and even 49,500. However, a breakdown below 47,200 could exacerbate selling pressure, dragging the index down to 46,600 and potentially even 46,200.
Here are three buy calls for the short term:
D-Link India: Buy | LTP: Rs 341 | Stop-Loss: Rs 312 | Target: Rs 380 | Return: 11 percent
The counter has witnessed a breakout of a bullish Inverse Head & Shoulder pattern with strong volume. It has also broken a trendline resistance and closed above Rs 340 levels. The overall structure of the counter is very lucrative as it is trading above all its important moving averages.
On the upper side, Rs 350 is an immediate resistance; above this, we can expect a big move till Rs 380+ in the shorter time frame, while on the downside Rs 315/310 is the demand zone for any correction.
The momentum indicator RSI (relative strength index) is also positively poised whereas MACD (moving average convergence divergence) is supporting the current strength.
Prestige Estates Projects: Buy | LTP: Rs 1,520 | Stop-Loss: Rs 1,350 | Target: Rs 1,734 | Return: 14 percent
The counter is in a classical uptrend and it has witnessed a breakout of an ascending triangle formation to resume its uptrend. The breakout coincides with rising volume and it manages to sustain above breakout level despite weakness in the broader market.
It is trading above its all-important moving averages with a positive bias in momentum indicators.
On the upper side, Rs 1,600 is an immediate psychological resistance; above this, we can expect a big move till Rs 1,700+ in the shorter time frame while on the downside Rs 1,350 is the demand level for any correction.
It is respecting its 20-DMA beautifully, which is a classic sign of trend strength.
Endurance Technologies: Buy | LTP: Rs 2,093 | Stop-Loss: Rs 1,950 | Target: Rs 2,304 | Return: 10 percent
The counter's recent breakout of both an ascending triangle and a Cup & Handle formation, accompanied by substantial volume, heralds a strong bullish trend. Its consistent adherence to the 200-DMA underscores the robustness of this trend, while trading above all significant moving averages further bolsters its attractiveness.
The momentum indicator RSI is also positively poised whereas MACD is supporting the current strength.
On the upper side, Rs 2,200 is an immediate resistance; above this, we can expect a big move till Rs 2,300+ in the shorter time frame while on the downside Rs 1,950 is the important support during any correction.
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