Nandish Shah, HDFC Securities
After a correction of about 5 per cent in the last few trading sessions, the Nifty again saw a rally in yesterday’s trade and closed above the 5-day and 20-day EMA at the end of trading. It is also seen breaking out of the downward sloping trendline which is located near the highs of 19th and 27th October.
In the recent fall, Nifty has taken support near the 10-week EMA. Bounceback has come from here. Nifty has never closed below its 10-week EMA since May 2021 which is located around 17,700. Looking at the options segment, we have seen put writing at 17,700-17,800. Going forward, the level of 17,700 will act as an important support for Nifty.
However, correction has been seen in Nifty. But as long as it stays above 17,700 it will remain an intermediate uptrend. The market will see more momentum going forward. But if Nifty closes below 17,700 then further weakness can come. Traders would be advised to remain bullish and take long positions with a stoploss of 17,700 for any downside. On the upside, resistance is visible for Nifty at 18,342 and 18,600.
Nifty Smallcap and Midcap also saw break outs on the daily chart and closed above their mid-October highs. We believe that there is still a lot of potential left in the mid and smallcaps. They are likely to increase further in the coming weeks and months.
To conclude, the short term trend remains positive for Nifty. The next target for Nifty is 18,350 and then 18,600. For long positions, put a stoploss at 17,700.
Today’s three calls in which there can be huge earnings in 2-3 weeks
Anjani Portland Cement: Buy | LTP: Rs 408.25 | Buy this stock with a stop loss of Rs 385 and target Rs 450. An upside of 10% can be seen in it in 2-3 weeks.
Fineotex Chemical: Buy | LTP: Rs 129 | Buy this stock with a stop loss of Rs 120 and target Rs 145. In 2-3 weeks, an upside of 12 percent can be seen in this.
Karnataka Bank: Buy | LTP: Rs 71.7 | Buy this stock with a stop loss of Rs 68 and target Rs 79. In 2-3 weeks, an upside of 12 percent can be seen in this.
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