The Nifty has been falling for the last three sessions. However, magnitude of the fall has not been that significant as it gradually retraced towards the previous breakout levels of 18,100. The index is still in the gap area of 18,103 - 18,259, which was formed on November 11, 2022. These gaps some time acts as a strong reversal point, considering when few more technical rationales also support the probable bullish trend reversal.
On week ended November 11, 2022, Nifty surpassed crucial double top resistance of 18,100 levels. Nifty has now retraced back to the previous breakout level of 18,100 and there are good chances that it finds the support there and resumes the up trend.
Nifty is still placed above its 20, 50, 100- and 200-days EMA (exponential moving average), which indicates bullish trend on all-time frames. On a bigger time frame, Nifty has formed bullish Inverted Head and Shoulder pattern, which projects big targets for the Nifty in the medium to long term.
However, for the short term, all-time high of 18,600 could act as an immediate resistance. Support for the Nifty is expected in the range of 18,000-18,100. Previous swing low is placed at 17,969, which should be kept as a stop-loss on closing basis in Nifty long positions. November and December months have been good months for equity markets if we were to go by the historical seasonal charts performance of last 29 years.
Here are three buy calls for short term:
MAS Financial Services: Buy | LTP: Rs 868 | Stop-Loss: Rs 816 | Targets: Rs 982-1,030 | Return: 19 percent
On week ended November 4t, 2022, downward sloping trend line breakout was registered on the weekly charts. Price breakout was accompanied by jump in volumes.
Now, the stock has retraced back to the previous breakout line and could resume its uptrend. The stock is placed above all important moving averages, indicating bullish trend on all time frames. It has been forming higher tops and higher bottoms on daily chart.
GMM Pfaudler: Buy | LTP: Rs 1,937 | Stop-Loss: Rs 1,740 | Targets: Rs 2,060-2,170 | Return: 12 percent
On week ended September 2, 2022, the stock broke out from multiple top resistance Rs 1,750 and also from the consolidation with significant jump in volumes. Post breakout, the stock rallied towards Rs 2,097 odd levels and fell in the consolidation.
It continued to remain in narrow consolidation for last two months. On November 16, 2022, the stock touched lower band of the consolidation and reversed north with rise in volumes.
Indicator and oscillators like RSI (relative strength index) and MACD (moving average convergence and divergence) have been showing strength in current uptrend. The stock price has been finding support on its 50 days EMA (exponential moving average), placed at Rs 1,821.
NLC India: Buy | LTP: Rs 77.35 | Stop-Loss: Rs 72 | Targets: Rs 86-91 | Return: 18 percent
The stock price has broken out from the bullish Cup and Handle pattern on the daily chart. Price Breakout is accompanied with jump in volumes.
The stock price is placed above all important moving averages. PSU sector has been outperforming for last many months. Indicators and oscillators have turned bullish on daily and weekly charts.
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