By Nagaraj Shetti
The sharp up trended movement continued in the industry for the third consecutive sessions on Wednesday and Nifty closed the day with hefty gains of about 326 points. A extended bull candle was formed on the every day chart and the Nifty has overtaken the important resistance location of the earlier opening down/up gap at 15065 levels and the current swing higher of 15176-25th Feb. This is positive indication and the current unfavorable pattern appears to have nullified and one may perhaps count on additional upside in the quick term.
The formation of new reduce leading of 25th February has been surpassed on the upside and the industry could start out displaying positive sequential movement like larger highs and lows in the quick term. Hence, any consolidation or intraday declines from right here could be a get on dips chance.
The medium-term uptrend in Nifty as per the weekly timeframe chart is intact and we observe a formation of a bigger degree of larger tops and bottoms more than the final quite a few months. The 10 period weekly EMA has been respected on dips so far. According to this action, one may perhaps count on additional upside towards the new highs quickly.
The quick term trend of Nifty continues to be up. The negation of current bearish patterns could indicate more upside in the quick term. The next upside levels to be watched about 15430 in the next 2-3 sessions. Immediate help is placed at 15160.
Stock Picks:
Buy Firstsource Solutions Ltd – (CMP Rs 101.50)
The attached weekly timeframe chart of FSL indicates an uptrend given that final week, which signal a bigger consolidation pattern as per smaller sized timeframe charts. Presently, the stock value is producing an try to stage the upside breakout of the essential overhead resistance about Rs 104-105 levels. A sustainable move above this location could imply a sharp upside breakout for the stock value. We observe a bigger positive sequence like larger tops and bottoms as per the weekly timeframe chart. Further upmove from right here could pull stock rates to new larger leading in the close to term. The weekly 14 period RSI is now placed above 65, which signal strength of upside momentum.
Buying can be initiated in FSL at CMP (101.50), add more on dips down to Rs 97, wait for the upside target of Rs 112 in the next 3-4 weeks. Place a stoploss of Rs 94.
Buy United Spirits Ltd- (CMP Rs 567.80)
After displaying declines, the stock value (United Spirits Ltd) has shifted into an upside bounce in today’s session. Today’s upmove could be viewed as as a larger bottom reversal pattern at Rs 531-26th Feb, compared to final bottom of Oct-20. We observe a formation of positive candlestick pattern as per every day/weekly timeframe chart, which signal the comeback of bulls from the lows. Volume has began to rise along with the current upmove in the stock value. The every day/weekly RSI shows positive indication.
Buying can be initiated in United Spirits Ltd at CMP (567.80), add more on dips down to Rs 545, wait for the upside target of Rs 620 in the next 3-4 weeks. Place a stoploss of Rs 530.
(Nagaraj Shetti is a Technical Research Analyst at HDFC securities. The views expressed are the author’s personal. Please seek advice from your economic advisor prior to investing.)