By Nagaraj Shetti
After displaying an great upmove in the last couple of sessions, Nifty slipped into profit booking from the new highs on Wednesday and closed the day decrease by 55 points. After opening on a positive note, the industry has shifted into additional upside in the early-mid component of the session.
A new all-time higher was formed at 17225 levels and the profit booking has emerged from the day’s highs. It later made an try to show upside recovery from the lows in the mid component, but was capable to sustain the recovery and closed close to the lows.
A affordable unfavorable candle was formed at the new highs, which indicate consolidation/minor weakness in the industry. Having moved up sharply not too long ago, the present consolidation/weakness could be deemed as a shopping for chance in the industry.
There is a larger possibility of upside recovery try from the lows in the brief term. Nifty on the intraday timeframe like 60 min is displaying a variety bound action with weak bias. There is an absence of any sharp promoting from close to the highs. The intraday help of 10 period EMA and 20 period EMA are intact.
Though Nifty declined on Wednesday, the all round industry breadth was on the positive side and broad industry indices like mid cap and smaller cap of NSE exchange have closed larger by .75% and .34% respectively. This is positive indication.
The brief term uptrend in the industry remains intact. though Nifty declined from the highs, nonetheless there is no formation of any substantial reversal of present uptrend in the industry. The consolidation/minor weakness could continue in the next 1-2 sessions, ahead of displaying upmove from the lows. Immediate help is placed at 16950 levels.
Stock Picks:
Buy PNC Infratech Ltd (CMP Rs 340.50)
After displaying variety bound action in the last couple of weeks, the stock value (PNC Infra) has witnessed a sharp upside breakout of Rs 330 in this week and closed larger on Wednesday. We observe a formation of constant larger higher formation on the weekly chart and the current swing low of Rs 275 of mid component of Aug-21 could be deemed as a new larger bottom of the sequence. The volume and weekly 14 period RSI indicate positive outlook ahead.
Buying can be initiated in PNC Infratech Ltd at CMP (340.50), add more on dips down to Rs 325, wait for the upside target of Rs 375 in the next 3-4 weeks. Place a stoploss of Rs 315.
Buy SOBHA Ltd – (CMP Rs 679.70)
The realty stock (Sobha Ltd) has been in a gradual downward correction amidst a variety movement more than the last 5-6 weeks, as per weekly chart. This week saw an great upside breakout of the variety and the stock value is now placed to move above the hurdle of Rs 680 levels. Volume has expanded throughout upside breakout in the stock value and weekly DMI/ADX signal additional strengthening of upside momentum ahead.
Buying can be initiated in SOBHA Ltd at CMP (679.70), add more on dips down to Rs 652, wait for the upside target of Rs 750 in the next 3-4 weeks. Place a stoploss of Rs 630.
(Nagaraj Shetti is a Technical Research Analyst, HDFC securities. Views expressed are the author’s won. Please seek advice from your economic advisor ahead of investing.)