The Nifty ended in the negative on April 17, breaking a nine-day winning streak. The high-low bar for the day engulfs that of the previous two sessions. This could mean formation of a short-term top and rises for the next few days could get sold into. Positional resistance for the Nifty is expected at 18,135.
Last week, the benchmark index registered a downward sloping channel breakout on the weekly chart. Indicators like Disparity Index, RSI and DMI have turned bullish on the daily and weekly charts. 50-day and 200-day EMA (exponential moving average) coincides at 17,500 odd levels and therefore it could act as a positional support for the Nifty.
Technical setup of Bank Nifty looks stronger than Nifty and therefore we can expect it to outperform. Bank Nifty resistance is expected at 43,100, while support for the same is expected at 41,300.
Nifty Midcap and Small cap indices have registered breakouts from downward sloping trendline and therefore market breadth is likely to remain strong.
Global market technical setup is bullish, which augers well for Indian Market too. Weak Dollar index favours the bullish bets on equity markets in the short term.
After three weeks of consecutive rise, we cannot rule out running correction or consolidation in the Nifty. However, looking at the overall trend it seems that downside in the Nifty would be limited. Market is expected to remain stock and sector specific bullish for the coming days.
Here are three buy calls for next 2-3 weeks:
Bank of Baroda: Buy | LTP: Rs 176 | Stop-Loss: Rs 167 | Target: Rs 187-202 | Return: 15 percent
The stock price is trading within the big symmetrical triangle, which adjoins major swing highs and lows since December 2022. The stock is on the verge of breaking out from the symmetrical triangle.
The chances of bullish breakout is higher as stock has been forming higher tops and higher bottoms on daily chart. Primary trend of the PSU bank index is bullish, as it has been holding above its 200-day EMA. Indicators and oscillators like RSI (relative strength index), MACD (moving average convergence divergence) and DMI (directional movement index) have turned bullish on daily charts.
Ugar Sugar Works: Buy | LTP: Rs 102.3 | Stop-Loss: Rs 89 | Targets: Rs 112-124 | Return: 21 percent
The downward sloping trendline breakout was seen on the daily charts. Price breakout is accompanied with rising volumes. Primary trend of the stock has been bullish, as stock is holding above long-term moving averages.
Indicators and oscillators have turned bullish on the daily and weekly charts. Sugar sector has started performing well after healthy correction.
Aditya Birla Fashion & Retail: Buy | LTP: Rs 224.75 | Stop-Loss: Rs 210 | Targets: Rs 242-255 | Return: 13 percent
On week ended April 6, 2023, the stock formed 'Long Legged Doji' candlestick pattern on the weekly chart. The stock has formed this reversal pattern after healthy fall from 6-month's price.
Weekly RSI has exited the oversold zone, which also adds the strength in the trend reversal. Stock has surpassed 20-day EMA resistance and has been sustaining above it.
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