By Subash Gangadharan
Markets have been constantly moving greater more than the final couple of sessions and generating new life highs in the approach. Buying has emerged on any intraday dips, thereby making certain the uptrend remains intact. The quick term uptrend is on the other hand starting to appear stretched. While the Nifty/Sensex could move up additional in the really close to term, we think that these most important indices could make a quick term best quickly. Zooming into the intraday charts of the Nifty, we can see that the index may well be forming a head and shoulder pattern.
The Sensex is also really close to the psychological level of 50,000, which is one more explanation to trigger a quick term sell off. Crucial supports to watch for a quick term trend reversal on the Nifty are at 14435. A close under this level could lead to the Nifty coming down towards the 14300-14200 levels.
Buy CESC
After correcting from a higher of 700 touched in September 2020, CESC located help at the 555 levels in early November 2020. These levels also roughly coincide with the prior supports tested in May and Aug 2020, thereby generating it a sturdy help.
The sock has due to the fact then rebounded and regularly been generating greater tops and greater bottoms more than the final couple of weeks.
Yesterday, the stock also broke out of the current higher of 640 on the back of above-typical volumes. This augurs effectively for the uptrend to continue.
Technical indicators as well are providing positive signals as the stock trades above the 20-day and 50-day SMA. Intermediate momentum readings like the 14-week RSI as well are in increasing mode and not overbought.
We think the stock is prepared to continue the next leg of its underlying uptrend and has the possible to move greater in the coming weeks. We, thus, suggest a Buy among the 670-685 levels. CMP is 683. Stop loss is at 624 although targets are at 810.
Buy ITC
ITC has entered into a new intermediate uptrend a couple of weeks back as it crossed its prior intermediate higher of 210. The stock has due to the fact then corrected and consolidated in a variety above the 200-day EMA.
Today, the stock broke out of the 200-206 variety on the back of above-typical volumes. This suggests that the stock is prepared to move greater and continue its intermediate uptrend.
Technical indicators as well are providing positive signals as the stock trades above the 20-day and 50-day SMA. Intermediate momentum readings like the 14-week RSI as well are in increasing mode and not overbought.
We think the stock is prepared to continue the next leg of its underlying uptrend and has the possible to move greater in the coming weeks. We, thus, suggest a Buy among the 208-212 levels. CMP is 211.2. Stop loss is at 205 although targets are at 226.
(Subash Gangadharan is a Senior Technical and Derivative Analyst at HDFC Securities. The views expressed are private. Please seek advice from your economic advisor just before investing)