The Nifty opened gap-up and closed in the red amid sideways movement in the market and global volatility. On the daily chart, it has formed a big bearish candle after taking resistance from around 18,175 levels.
On the hourly timeframe, the Nifty was making higher highs and higher lows and closed above 18,050 which indicates an indecisive market. The momentum oscillator RSI (relative strength index - 14) on the daily chart is at around 65; whereas the MACD (moving average convergence and divergence) is moving above the centre point from lower levels.
India VIX has increased from 16.13 to 16.74 levels below its 200 EMA (exponential moving average).
Maximum pain for Nifty is at 18,100. Nifty Put Call ratio is at 0.96 whereas Bank Nifty PCR is at 0.68. Important support levels for Nifty are at around 18,000, 17,900 and 17,750 whereas the resistance levels are at 18,100, 18,250 and 18,400.
As per the F&O data, short buildup has substantially increased in in the money (ITM) calls, whereas long unwinding as seen in out of the money (OTM) puts which indicates a negative market. 18,400 and 18,200 have high short built-ups whereas 18,100 and 18,000 have high long built-ups.
Here are three buy calls for next 2-3 weeks:
HDFC Asset Management Company: Buy | LTP: Rs 2,106 | Stop-Loss: Rs 2,000 | Target: Rs 2,305 | Return: 9.5 percent
After a long bearish trend, now the price has recovered from the prior supply zone. First, the price has witnessed a new low and then bounce back from Rs 1,702 mark.
Recently the stock has witnessed a breakout of the Falling channel and again reclaims the upper band of the pattern indicating immediate support & bullish set-up in the counter.
In addition, the price has also shifted just above the 21 exponential moving averages (EMA) with Bullish Engulfing candlesticks, which indicates a bullish strength.
A momentum indicator RSI (14) has successfully given a breakout of the falling line and witnessed divergences; pointing out a further reversal in the counter.
Based on the above technical structure, one can initiate a long position in HDFC AMC at current market price of Rs 2,106 or a fall in the price till Rs 2,070 levels can be used as buying opportunity for the upside target of Rs 2,205.
However, the bullish view will be negated if the price closes below the support level of Rs 2,000.
Garden Reach Shipbuilders & Engineers: Buy | LTP: Rs 494.20 | Stop-Loss: Rs 470 | Target: Rs 540 | Return: 9.3 percent
On a daily chart, the stock has witnessed a sharp up move and the price has made a high of Rs 486 in recent weeks and then the stock traded in a very tide range.
After a small consolidation, now the price has given a breakout of a Bullish Pennant pattern with spurt volume indicating a continued bullish trend. The price also settled just below the upper Bollinger band after testing the middle band, confirming bullish strength. In the Last trading session, the price formed Bullish candlesticks and closed higher.
An oscillator Stochastic RSI is also supportive for the long position with positive crossover. The daily strength indicator RSI (14) is in bullish mode and sustaining above the 65 level.
Hence, based on the above technical structure one can initiate a long position in GRSE at Rs 494.20, or a fall in the price till Rs 485 levels can be used as buying opportunity for the upside target of Rs 540.
However, the bullish view will be negated if the price closes below the support level of Rs 470.
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