The psychological resistance of 16,000 caused a rush to book gains on the Nifty, which was followed by a wise retreat from the 15,500 level. As long as the index remains above its 20-DMA, the structure is still positive (day moving average – 15,750). Bears will once again get aggressive for a move towards 15,500-15,350 levels if the Nifty begins to trade below its 20-DMA, else we may anticipate a comeback towards 16,050-16,200 levels.
Bank Nifty was outperforming, but the 50-DMA served as resistance, and profit taking was seen there. The 20-DMA of 33,500, however, is a level of immediate support. We may anticipate a bounce back towards 34,000–34,500 levels if it is able to hold its 20–DMA; else, weakness may extend toward 33,000–32,500 levels.
Despite a market drop, FIIs’ long position in index futures is less than 15%, and the Put-Call ratio is also below 1, meaning the market is still anticipating a recovery for short-covering.
Despite many attempts at lower levels, the rupee’s weakening is putting the bulls on the defensive; as a result, the market will be watching the movement of the rupee as well as the actions of FIIs. Other significant triggers include the direction of the US market, the price of crude oil, and the dollar index.
Here are three buy calls for next 2-3 weeks:
Siemens: Buy | LTP: Rs 2,560 | Stop-Loss: Rs 2,400 | Target: Rs 2,814 | Return: 10 percent
The counter has seen a breakout of a symmetrical triangular formation with significant volumes while it is in a traditional uptrend. As it trades above its crucial moving averages, the whole structure is quite optimistic.
In the short term, we may see a run-up into levels of Rs 3,000+ over the immediate resistance level of Rs 2,650 on the upside. At every drop, Rs 2,400 serves as strong support on the downside.
Mirza International: Buy | LTP: Rs 245 | Stop-Loss: Rs 225 | Target: Rs 284 | Return: 15 percent
On the daily timescale, the counter is building a rising channel formation, which is a powerful bullish setup. After reaching a new 52-week high, it has challenged the Rs 190 level that served as its last breakout milestone.
On the plus side, Rs 270 is a weak spot. In the near future, we might see a run-up towards the Rs 290 level above this. Rs 220 serves as strong support throughout any downturn on the downside.
Sumitomo Chemical India: Buy | LTP: Rs 466 | Stop-Loss: Rs 425 | Target: Rs 530 | Return: 14 percent
On the daily chart, the counter is forming a cup and handle pattern. Additionally, a V-shaped recovery from the 200-SMA, which is located at the Rs 420 level, was visible.
The majority of momentum indicators are in positive territory and point to a potential increase in this counter’s surge.
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