The Nifty 50 consolidated in a narrow range and ended December 18 with a small candlestick pattern on the daily chart. The index has been rising for the last seven weeks and has reached an uncharted territory. Most of the benchmark indices are trading at their all-time highs. Except IT and media, all sector indices are also trading at the life-time highs. As per seasonality, December has been the best month for the Nifty and the index has gained more than 6 percent so far this month.
At present, lower crude oil prices, falling US bond yields and the Dollar Index have been supporting the equity market sentiments.
Oscillators have reached the overbought zone on the daily and weekly charts for the Nifty. However, unless important support breaks on the price charts, a trend reversal would not be confirmed. So, it would be advisable to hold on the longs with the trailing stop-loss for index and stocks.
Previous swing high of 21,000 is expected to interchange its role as a support going forward. Longs should be held till Nifty breaks 21,000 on a closing basis. On the upside, the next target for the Nifty is expected at 22,231, which happens to be a 100 percent extension level of the entire swing seen from March 2023 bottom (16,828) to September 2023 top (20,222) and from September 2023 top (20,222) to October 2023 bottom (18,837).
Bank Nifty could extend the current rally up to 50,000 and beyond. Support for the Bank Nifty is seen in the range of 47,200-47,500.
Here are three buy calls for next 3-4 weeks:
Deepak Fertilisers And Petrochemicals Corporation: Buy | LTP: Rs 699 | Stop-Loss: Rs 650 | Target: Rs 770 | Return: 10 percent
The stock price has surpassed the previous top resistance of Rs 697 on the closing basis. Bullish Cup and Handle pattern breakout has seen on the daily chart.
The price breakout is accompanied with jump in volumes. The stock is placed above all important moving averages, indicating bullish trend on all time frames.
GSFC: Buy | LTP: Rs 230.60 | Stop-Loss: Rs 206 | Target: Rs 270 | Return: 17 percent
Gujarat State Fertilizers & Chemicals retraced back to the previous breakout level and has shown throwback. Stock price is placed above all important moving averages, indicating bullish trend on all time frames.
Indicators and oscillators like DMI (directional movement index) and RSI (relative strength index) have turned bullish on the daily charts. Price breakout is accompanied with jump in volumes. Fertilizer sector has started outperforming.
Castrol India: Buy | LTP: Rs 147.60 | Stop-Loss: Rs 133 | Target: Rs 175 | Return: 19 percent
The stock price has broken out from downward sloping trend line resistance. Stock price have also broken out from the narrow consolidation, which held for previous two weeks.
The stock price is placed above all important moving averages, indicating bullish trend on all time frames. Indicators and oscillators like DMI and RSI have turned bullish on the daily charts. Price breakout is accompanied with jump in volumes.
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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