Traders are advised to hold longs with trailing stoploss of 19,200 in Nifty on the closing basis.
The Nifty went nowhere after opening on July 10 and remained within the range of the previous session. The index ended with the gains of 24 points at 19,356. It has been forming a bullish higher top, higher bottom candlestick pattern on the daily chart. Primary and intermediate trend of the Nifty remains positive as it has been holding above 20, 50, 100 and 200-day EMA (exponential moving average).
Moreover, weekly momentum readings like the 14-week RSI (relative strength index) and 10-week MFI (money flow index) remained in rising mode and are not in overbought territory yet, we believe the uptrend is likely to continue.
On the Derivative side, we have seen aggressive Put writing at 19,200-19,300 levels, which coincides with 11-day EMA at 19,201. Therefore, on the downside, 19,200-19,300 could now be considered as an immediate support for the index.
The Nifty has formed a bearish Shotting Star candlestick pattern on the weekly chart. High of last week is placed at 19,523 which could now act as an immediate resistance for it. Above 19,523, the Nifty could move towards next resistance of 19,700-19,900 for coming weeks.
Traders are advised to hold longs with trailing stoploss of 19,200 in Nifty on the closing basis.
Nifty Midcap and Small cap indices have risen 23 percent and 27 percent from the March lows. Negative divergence is observed on the Nifty Midcap and Smallcap indices daily charts. Moreover, percentage of stocks above 200 DMA (day moving average) has surpassed 78 percent in NSE500, which can be considered overbought breadth.
Weekly RSI for Smallcap index has reached above 75, which is also an overbought reading. Therefore, for Midcap/Smallcaps our advice is to remain cautious and one should be very selective in buying midcap/smallcap stocks for short term.
Here are three buy calls for the next 3-4 weeks:
Orient Cement: Buy | LTP: Rs 137 | Stop-Loss: Rs 130 | Targets: Rs 145-156 | Return: 14 percent
The stock price has broken out on the weekly chart from the downward sloping trendline, adjoining the weekly highs of February 11, 2022 and January 6, 2023. Primary trend of the stock is positive as the stock price is trading above its 200-day EMA.
Momentum Oscillators like – RSI (11) and MFI (10) are sloping upwards and placed above 50 on the daily chart, indicating strength in the current uptrend of the stock.
Suprajit Engineering: Buy | LTP: Rs 425 | Stop-Loss: Rs 395 | Target: Rs 460-475 | Return: 12 percent
The stock price has broken out from the symmetrical triangle on the weekly chart with higher volumes. It has been forming bullish higher top, higher bottom formation on the daily chart.
The stock price has been taking support around 200-day EMA since February 2023. RSI Oscillator (11) is sloping upwards and placed above 60 on the daily chart, indicating strength in the stock.
Mahindra Holidays and Resorts India: Buy | LTP: Rs 307.5 | Stop-Loss: Rs 292 | Targets: Rs 325-338 | Return: 10 percent
The stock price has broken out on the daily chart with sharp rise in volumes to close at highest level since May 31, 2023. Primary and intermediate trend turned positive as stock price is trading above all important moving averages.
Momentum Oscillators – RSI (11) and MFI (10) is sloping upwards and placed above 60 on the daily chart, indicating strength in the current uptrend of the stock.
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