Indian equity markets have continued their northward journey, snubbing the weakness in global markets. The Nifty also completed its unfinished business of hitting an all-time high but the broader market is still lagging behind. The overall structure is still bullish but some fatigue is visible, as the market is not getting support from global peers.
The December series started on a heavy note, as we have seen a healthy rollover with a Nifty futures premium of more than 130 points. Long positions in index futures by FIIs are also at a two-year high. Therefore, the market is overbought on the derivative front and it may consolidate or witness some correction before resuming its bullish momentum.
On an immediate basis, 18,500 Put writers are showing strong confluence; therefore, the Nifty will try to trade above 18,500 but if it slips below the level, we can expect some profit-taking where 18,325–18,245 is the next support zone. On the upside, 18,800-18,888-19,000 will be the next resistance levels.
The Bank Nifty is also consolidating in the range of 42,700-43,300 with intraday volatility. If it manages to cross the 43,333 level, we can see a move towards the 43,700–44,000. If it falls below 42,700, we can expect some profit-taking in the 42,200–42,000 range.
Here are 3 buy calls for the next two-three weeks:
CCL Products India: Buy | LTP: Rs 539 | Stop-Loss: Rs 510 | Target: Rs 620 | Return: 15 percent
The counter is in a classical uptrend, where we can clearly see a textbook Flag Pattern on the daily chart and a Cup and Handle pattern on the weekly chart. The latest breakout may provide further momentum to this counter, where Rs 580 and Rs 620 are immediate target levels.
On the downside, the breakout level of Rs 525 is the immediate support and the 50-daily moving average (DMA) of Rs 500 a major support. Moving Average Convergence and Divergence (MACD) is trading above the centerline, whereas the Relative Strength Index (RSI) has crossed the hurdle of 60. The average directional index (ADX) is trading above the 20 mark to support the strength of the current uptrend.
IRB Infrastructure Developers: Buy | LTP: Rs 273.5 | Stop-Loss: Rs 255 | Target: Rs 302 | Return: 10 percent
Infrastructure is showing good traction where IRB has a lucrative chart structure. Since September 28, it has been moving in an upsloping channel formation and recently saw the breakout of a falling wedge formation.
On November 29, it managed to close above a key horizontal resistance line of Rs 270 with high volume, which gives confidence to the bulls for a move towards the previous swing high of Rs 303.
It has adhered to its 20-DMA baseline, which is currently set at Rs 250. The momentum indicators RSI and ADX are both positive. On November 24, there was also a golden crossover.
Affle India: Buy | LTP: Rs 1,251.5 | Stop-Loss: Rs 1,180 | Target: Rs 1,500 | Return: 20 percent
The long-term structure of this counter is bullish. Bullish Inverse Head and Shoulder formation are in progress on both daily and weekly time frames.
The small Inverse Head and Shoulder formation on the daily chart has a neckline at Rs 1,290, while the neckline of the larger Inverse Head and Shoulder formation on the weekly chart is at Rs 1,360, above this, we can expect a rally towards Rs 1,500.
On the downside, the cluster of 50 and 20-day moving averages (DMAs) at Rs 1,215 is the immediate support, while the 100 DMA at Rs 1,190 is a major support level. RSI is witnessing a positive crossover, whereas MACD is witnessing a centerline crossover.
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