The Nifty 50 index has consistently displayed a bullish price structure, characterised by higher top, higher bottom formations, and is hovering near its all-time high levels on the monthly charts, indicating a strong positive sentiment for the long term. Recently, the index found significant support at the 13-week EMA (exponential moving average) and formed a notable Bullish Opening Marubozu candle pattern on the weekly charts, reinforcing the prevailing upward trend.
The index has broken out of an inverted head-and-shoulder pattern on the daily charts (not a classic one), suggesting heightened bullish momentum. Key technical indicators, including the relative strength index (RSI), are showing positive readings above 60 across weekly, and monthly scales, signalling favourable momentum conditions.
In terms of levels, immediate resistance is identified at 22,530, a level of significant importance on higher time frames, with further resistance seen at 22,800 followed by 23,170. On the flip side, crucial support levels are observed at 22,000 and 21,700.
Given the current chart patterns, a strong bullish phase is anticipated for the longer term. Therefore, it is recommended to look for buying opportunities above the 22,530 level, with potential upside targets ranging from 22,800 to 23,170. To effectively manage risks, it is advisable to implement a strict stop-loss strategy at 22,000 on a closing basis.
Here are three buy calls for the next 2-3 weeks:
State Bank of India: Buy | LTP: Rs 752.35 | Stop-Loss: Rs 692 | Target: Rs 881 | Return: 17 percent
Since June 2020, SBI has exhibited a robust price structure, characterized by a rising trend. Recent weeks have seen polarity, suggesting a continuation of its upward trajectory.
The stock has consistently remained above important averages such as the 12-weekly and 26-weekly, signaling a positive trend. Additionally, the MACD (moving average convergence divergence) study indicates increasing values in the positive territory, further reinforce the bullish momentum.
Moreover, on the ratio chart of SBI against Nifty, a polarity observed from the 2022 swing indicates a continuation of its outperformance.
Going ahead, we expect the prices to go higher till the level of Rs 881. The bullish view will be negated if we see prices sustaining below Rs 692 level.
Aegis Logistics: Buy | LTP: Rs 446.65 | Stop-Loss: Rs 405 | Target: Rs 557 | Return: 25 percent
Aegis Logistics has seen significant chart development following a rally since March 2022. The stock formed Inverted Head and Shoulders chart pattern and subsequently broke out. After retracing to retest the pattern, the current week has shown a strong pullback, indicating a continuation of its upward trajectory.
Moreover, Aegis Logistics maintains its position above key averages such as the 12-week and 26-week EMAs. The RSI study consistently remains above 60 across various timeframes, further confirming the breakout driven by bullish momentum.
Additionally, on the ratio chart comparing Aegis Logistics against Nifty, a base formation suggests the beginning of an outperformance trend.
Going ahead, we expect the prices to go higher till the level of Rs 557. The bullish view will be negated if we see prices sustaining below Rs 405 level.
Aurobindo Pharma: Buy | LTP: Rs 1,089 | Stop-Loss: Rs 1,007 | Target: Rs 1,314 | Return: 20 percent
Aurobindo Pharma has maintained a robust price structure, displaying a clear uptrend since February 2023, characterized by consistent higher highs and higher lows. After a healthy retracement from January 2024 following a sharp upward move, the stock has found support on the 26-week exponential moving average, suggesting a mean reversion scenario.
Additionally, a change of polarity has been observed, where the resistance of May 2021 now acts as a strong support, signaling a continuation of the upward momentum.
On the daily scale, the stock has formed a double bottom formation, indicating alignment between lower and higher timeframes for an upward trajectory. Notably, the momentum indicator RSI has shown a polarity shift, suggesting a change in momentum that could contribute to an upward path.
Looking forward, there is an anticipation of further price ascent towards Rs 1,314 mark. It is recommended to set a stop-loss at Rs 1,007, strictly based on the 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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