By Nagaraj Shetti
After displaying a enormous upside breakout of the variety at 15960 levels on Tuesday, Nifty shifted into a adhere to-by way of up move on Wednesday and closed the day larger by 128 points. After opening on an upside gap of 65 points, Nifty shifted into a additional up move in the early-mid component of the session. A new all-time higher was registered at 16290 levels and later shifted into a variety movement with minor profit booking from the highs.
A affordable positive candle was formed on the each day chart with minor upper shadow, which indicate a adhere to-by way of up move in the market place. This pattern confirms a valid upside breakout of the variety of Tuesday. The upside gap of the last two sessions is nonetheless intact and the formation of minor upper shadow in Wednesday’s bull candle signal possibilities of minor profit booking from the highs. Though Nifty made new all-time highs, the general market place breadth was unfavorable on Wednesday and broad market place indices like mid-cap and modest-cap of NSE exchange have slipped into decline by 1.19% and 1.09% respectively.
Nifty as per extended term charts is strongly up and a sharp upside breakout as per weekly timeframe chart is visible. Hence, any profit booking from the highs could be a acquire on dips chance.
The quick term trend of Nifty continues to be up and the sharp upside breakout has been confirmed. Having moved up sharply in last 2 sessions and weak market place breadth is most likely to pull the market place into profit booking from the highs in the next 1-2 sessions. Any dips down to 16K mark is going to be a acquire on dips chance. Our initial upside target of 16300 has practically been reached (made a higher of 16290 on Wednesday). The next upside levels to be watched about 16500 in the next one week.
Stock Picks:
Buy HEG LTD– (CMP Rs 2371)
The stock value as per the weekly timeframe chart indicates a bigger variety bound action more than the last a lot of months. The stock value is at the moment producing an try to break above the intermediate resistance of downsloping trend line of bigger variety at Rs 2370-2380 levels.
Hence, a sustainable move above this location could open a sharp up move in the underlying for close to term. Weekly 14 period RSI has turned up above 60 levels, which indicate a strengthening of upside momentum in the stock value.
Buying can be initiated in HEG Ltd at CMP (2371), add more on dips down to Rs 2265, wait for the upside target of Rs 2605 in the next 3-4 weeks. Place a stoploss of Rs 2205.
Buy CAN FIN Properties LTD – (CMP Rs 564)
The stock value (CANFINHOME) indicate a sharp upside bounce in this week. We observe a formation of triangle sort pattern on the weekly chart and the stock value is now producing an try to stage upside breakout of the pattern at Rs 575 levels. Hence, a sustainable move above Rs 575 could be deemed as a decisive upside breakout of the pattern and one may well anticipate more upside in the quick term. Weekly 14 period RSI and DMI/ADX are signalling additional strengthening of upside momentum in the stock value.
Buying can be initiated in CANFINHOME at CMP (564), add more on dips down to Rs 540, wait for the upside target of Rs 625 in the next 3-4 weeks. Place a stoploss of Rs 525.
(Nagaraj Shetti is a Technical Research Analyst at HDFC securities. Views expressed are the author’s personal. Please seek advice from your monetary advisor ahead of investing.)