The Nifty broke the two-day losing streak on January 23 on the back of strong global cues and closed with 91 points gain at 18,119.
The short-term trend in the Nifty looks positive as the index trades above its five-day and 11-day EMA (exponential moving average). The Nifty Open Interest Put Call ratio surged to 0.94 level from 0.83 level on the back of aggressive Put writing at 18,000-18,100 levels. The Nifty has closed above downward sloping trendline resistance, adjoining the highs of December 1 and December 14, 2022.
For last four weeks, the benchmark index has been consolidating in the narrow range of 17,761-18,265, forming a descending triangle pattern on the daily chart with multiple bottoms in the range of 17,750-17,800. Therefore, on the downside, 17,800 could now be considered as an immediate support for the Nifty and one should remain bullish with stop-loss of 17,800 level.
On the upside 18,185-18,265 could act as an immediate resistance for Nifty. We may see upside momentum once it manages to surpass recent swing high of 18,265 convincingly.
Technical setup of the global equity market is bullish, which augers well for the Indian markets too, but domestic events like ongoing result season and upcoming Union Budget on February 1, 2023 could decouple the move in Indian markets for the short term.
Here are three buy calls for the next 3-4 weeks:
Indian Oil Corporation: Buy | LTP: Rs 83.45 | Stop-Loss: Rs 79 | Target: Rs 89-92 | Return: 10 percent
The stock price has broken out on the weekly chart from the downward sloping trendline adjoining the highs of April 22, 2022 and December 16, 2022. Trend of the stock is positive as stock price is trading above its important moving averages.
Momentum oscillators - RSI (relative strength index - 11) and MFI (money flow index - 10) is sloping upwards and placed above 60 on the weekly chart, indicating relative strength in the stock.
Oil Marketing stocks are looking good on the short and medium-term charts. One can buy the stock in the range of Rs 83.45-81.
Control Print: Buy | LTP: Rs 450 | Stop-Loss: Rs 415 | Target: Rs 495-515 | Return: 14 percent
The stock price has broken out on the daily chart from the downward sloping trendline, adjoining the highs of August 25, 2022 and December 13, 2022. Primary Trend of the stock is positive as stock price is trading above its 200-day EMA.
Momentum oscillators - RSI (11) and MFI (10) are sloping upwards and placed above 60 on the daily chart, indicating strength in the stock. One can buy the stock in the range of Rs 450-430.
HCL Technologies: Buy | LTP: Rs 1,121 | Stop-Loss: Rs 1,070 | Target: Rs 1,190-1,220 | Return: 9 percent
The stock price has broken out on the daily chart where it closes at highest level since December 5, 2022. In the month of December, stock price has formed strong base around 200-day EMA.
Plus DI (directional indicator) is trading above minus DI while ADX (average directional index) line is placed above 20, indicating momentum in the current uptrend. Nifty IT Index has broken out on the daily chart. One can buy the stock in the range of Rs 1,121-1,100.
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