The Nifty continued its upward journey for the second day in the row on Monday on the back of strength in banking & financial services, auto, real estate and oil&gas stocks.
After showing a rangebound movement in the last few sessions, the Nifty has broken out on the upside during later part of Monday and closed higher by 84 points. It closed at highest level since January 17, 2022.
The positive chart pattern like higher tops and bottoms is intact on the daily chart. The 50 days EMA (exponential moving average) has been holding above its 200 days EMA, which indicates long term bullish trend for Nifty. Momentum Oscillators like RSI (relative strength index 11) and MFI (money flow index 10) on the daily chart suggest strength in the current uptrend.
In the derivative side, we have seen aggressive Put writing at 17,900-18,000 strikes. This level coincides with the recent swing low of 17,959. Therefore, on the downside, 17,900-18,000 could now be considered as an immediate support for the Nifty.
To conclude, the Nifty has surpassed the crucial resistance of 18,000-18,100 levels and we may see directional move in the benchmark. On the higher side we are expecting Nifty to reach to an all-time high level of 18,600 and go beyond.
Traders are advised to hold longs with 17,900 stop-loss in Nifty on closing basis.
Here are three buy calls for the next 3-4 weeks:
Minda Corporation: Buy | LTP: Rs 205 | Stop-Loss: Rs 195 | Target: Rs 218-225 | Return: 10 percent
The stock price has broken out from the downward sloping trendline on the daily chart with higher volumes to close at highest level since October 13.
Primary trend of the stock turned positive as stock price closed above its 200 days EMA. Momentum Oscillators like RSI (11) and MFI (10) have witnessed trendline breakout, indicating higher possibility of price to gain momentum from hereon. One can buy the stock in the range of Rs 205-200.
Rallis India: Buy | LTP: Rs 226.45 | Stop-Loss: Rs 213 | Target: Rs 242-250 | Return: 10 percent
On week ended October 21, the stock price broke out from the resistance zone with higher volumes. For last three weeks, stock price has been trading in a narrow range with lower volumes.
Trend of the stock turned positive as the stock price is trading above its 20-week EMA. Technical indicators are indicating stock price has reversed its downtrend and now can move up gradually from here on. One can buy the stock in the range of Rs 226-220.
EIH: Buy | LTP: Rs 185 | Stop-Loss: Rs 174 | Target: Rs 200-210 | Return: 14 percent
The stock price has broken out from the symmetrical triangle on the weekly chart with higher volumes. Stock price is consolidating since last nine weeks.
Primary trend of the stock is positive as it is trading above its 50, 100 and 200 days EMA.
We expect stock price to end consolidation and resume its uptrend in the days to come. One can buy the stock in the range of Rs 185-180.
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