Bears ruled the street as Nifty nosedived 326 points on September 24. The bullish setup was under threat on the back of multiple bearish divergences and rising trendline breakdown.
The six days of continuous fall have placed the index near short-term support levels and a mild pullback can be expected in the coming trading sessions though the selling pressure cannot be ruled out at higher levels.
As per the Fibonacci theory, the key low of August 3 at 10,882 has been touched on the lower side which indicates that the medium-term trend is favouring the bears and any pullback is likely to see supply pressure.
The level of 10,737 is likely to act as a support for the next few days and a bounceback till 10,980 can be expected.
The index is trading near 261.8 percent Fibonacci projected level, based on the previous week's trading range, suggesting that bears might take a breather.
Traders can wait for a bounce till 10,980 to create short potions in the index.
Here are three buy calls for the next 2-3 weeks:
Untouched by bears, this stock has hit the fresh all-time high. The recent positive crossover in the momentum indicators suggests that the stock is likely to maintain its bullish bias and higher levels can be expected in the coming days.
The RSI has bounced back from the significant support levels and the prices are trading above all short-term and medium-term moving averages.
Wipro | Buy | LTP: Rs 304 | Target price: Rs 328 | Stop loss: Rs 288 | Upside: 8%
After a recent breakout, the stock has retraced mildly and is trading near the support level.
The momentum indicators in the monthly and weekly timeframe are trading in a bullish zone and daily RSI is trading at an important support level.
The upward slope of medium-term moving averages ribbon suggests that the current fall is likely to generate buying interest and higher levels can be expected.
Granules India | Buy | LTP: Rs 359.40 | Target price: Rs 397 | Stop loss: Rs 342 | Upside: 10%
The stock is trading with a higher top and higher bottom cycle and has gone through mild retracement recently.
The current fall has been arrested at a 20-day simple moving average with the formation of a hammer candlestick pattern and the price has also taken support at the previous top.
The momentum indicators are trading at support levels which indicates that bulls might take the charge once again.
(The author is Senior Technical Analyst at Rudra Shares & Stock Brokers)
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