By Nagaraj Shetti
After displaying a sustainable up move in the last couple of sessions, Nifty witnessed profit booking from the new highs of 16701 levels on Wednesday and closed the day reduce by 45 points. After opening on an upside gap of 77 points, Nifty made an try to move up in the early element of the session. Sharp intraday profit booking has witnessed a day’s higher of 16700 levels and the weakness continued till mid to later element. A extended damaging candle was formed on the everyday chart right after opening greater, which indicates a formation of a bearish counterattack variety candle pattern. This industry action suggests additional consolidation or minor downward correction ahead.
Previously, we observed downward correction up to 2-3 sessions throughout broader variety movement and not too long ago the consolidation with narrow variety movement. The underlying uptrend of Nifty as per smaller sized and bigger time frame is intact and Wednesday’s pattern is not displaying any alarming signal with regards to a best reversal pattern. However, there is a possibility of additional consolidation or minor weakness inside a variety in the brief term.
The industry appears to have began tiring at the new highs of 16700. But, there is no indication of any reversal pattern unfolding at the greater levels. Any decline from right here down to the help of 16400 (20 day EMA on a everyday chart) could be a purchase on dips chance in the close to term. We count on an upside bounce from the lows in the coming sessions. The upside target for Nifty remains at 16900 levels.
Stock Picks:
Buy Mangalore Refinery and Petrochemicals– (CMP Rs 45.20)
The sharp trended decline of the last couple of months appears to have completed, as this oil refinery stock (MRPL) has began to show a sustainable upside bounce from the lows. We observed formation of a bullish hammer variety candle pattern last week (as per weekly chart) and a decent up move so far this week from the lows. This pattern indicates a important bottom reversal at the lows of Rs 39.75-last week. The stock price tag has also bounced up from the initial help of the up-swing trend line at Rs 42 levels. Weekly 14 period RSI and weekly DMI/ADX patterns signal more upside for the stock price tag ahead.
One may possibly look to purchase MRPL at CMP (Rs 45.20), add more on dips down to Rs 43 and wait for the upside target of Rs 50.50 in the next 3-4 weeks. Place a quit loss of Rs 41.50.
Buy Happiest Minds Technologies Ltd – (CMP Rs 1432)
The weekly time frame chart of this stock indicates a multi-month uptrend in the last several months. The stock price tag has witnessed an up move as per the positive sequence of greater tops and bottoms. The greater bottom formation was restricted to a variety movement on most of the occasions. After displaying a equivalent variety movement in the last one month, the stock price tag is now placed to show an upside breakout of the variety at Rs 1460 levels. The pattern of everyday ADX/DMI and 14 period RSI indicate strengthening of upside momentum for the stock price tag ahead.
Buying can be initiated in Happiest Minds Technologies Ltd at CMP (1432), add more on dips down to Rs 1370, wait for the upside target of Rs 1580 in the next 3-4 weeks. Place a quit loss of Rs 1330.
(Nagaraj Shetti is a Technical Research Analyst at HDFC securities. Views expressed are the author’s personal. Please seek the advice of your monetary advisor ahead of investing.)