The Nifty 50 index has been consistently reaching new all-time highs over the past six months. However, in the latest month, it has been trading below its closing prices of the last couple of months, suggesting some profit-taking, possibly due to significant events like the Lok Sabha elections.
On the weekly charts, the Nifty has seen consolidation within the range of 21,700 to 22,800 levels since March 2024. At the lower end of this range, it formed a Double Bottom pattern, while at the upper end, a Shooting Star candle pattern emerged, indicating a medium-term rangebound movement.
Key technical indicators, including the relative strength index (RSI), are still holding above the 55 level but are moving downward on the weekly charts, suggesting a weakening bullish momentum in the medium term.
Resistance levels are identified at 22,600, 22,800, and 23,170, with significant support levels at 21,700, followed by 21,500 and 21,130.
Given the prevailing chart patterns, the Nifty's major support is seen at 21,700, marking a potential trend reversal level from "positive to neutral," and it's currently in a phase of rangebound movement for the medium term.
Therefore, it's advisable to consider buying opportunities at the support level, targeting potential upside levels ranging from 22,600 to 22,800. To manage risks effectively, implementing a strict stop-loss strategy at 21,700 on a closing basis is recommended.
Here are three buy calls for the next 2-3 weeks:
Sun TV Network: Buy | LTP: Rs 656.80 | Stop-Loss: Rs 602 | Target: Rs 785 | Return: 20 percent
Despite the overall market downturn, Sun TV Network demonstrates notable resilience, displaying a strong trend. Weekly price analysis indicates a robust structure, breaking out of a flag & pole pattern with increasing volume participation.
On the daily chart, rapid retracement is evident, with a six-day decline swiftly retraced in just two days, accompanied by a significant volume surge, reflecting a sturdy price foundation.
MACD (moving average convergence divergence) analysis further supports the bullish sentiment, with a weekly bullish crossover and sustained positivity across all timeframes, signaling a strengthening positive momentum.
Looking ahead, we anticipate further upward movement in prices, targeting a level of around RS 785. However, it's essential to monitor the RS 602 level closely; sustained price action below this point could invalidate the bullish outlook.
Godfrey Phillips India: Buy | LTP: Rs 3,448.75 | Stop-Loss: Rs 3,183 | Target: Rs 4,082 | Return: 18 percent
Godfrey Phillips's price structure displays resilience, with a clear uptrend following a prolonged consolidation phase from the year 2015 to 2022. Consistent formation of higher highs and higher lows indicates a positive trajectory.
On a daily scale, the stock demonstrates notable relative strength compared to the broader market. Mean reversion dynamics are evident, with reliable bounces from key moving averages like the 13-week and 50-week exponential moving averages (EMA), reinforcing the positive trend.
The ADX (average directional index) study further validates the breakout's strength, with ADX rising alongside price movements and exceeding 50. Additionally, the positive directional indicator ( DI) surpasses 25, indicating robust bullish momentum.
Looking forward, we anticipate further upward movement in prices, with a target level of around Rs 4,082. However, it's essential to monitor the Rs 3,183 level closely; sustained price action below this point could invalidate the bullish outlook.
Tata Motors: Buy | LTP: Rs 1,030.3 | Stop-Loss: Rs 950 | Target: Rs 1,215 | Return: 18 percent
Despite market volatility, Tata Motors maintained a robust upward trajectory since April 2023, nearing its all-time high. It has successfully held key support levels throughout.
A volatility contraction pattern has emerged on the daily charts, suggesting a potential breakout that could fuel further momentum.
Every week, the stock comfortably resides above critical averages such as the 13-week and 26-week EMA, signaling a positive trend. Stochastic analysis indicates an uptrend, signaling a pickup in momentum.
Going forward, we anticipate continued upward movement in the stock, with a potential target price of Rs 1,215. To manage risk effectively, it's advisable to set a stop-loss at Rs 950 on a closing basis
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