The Nifty50 has been finding support around 15,190 levels for the past two trading sessions. On the daily charts, the Nifty made a double bottom at 15,190 odd levels and concluded with a ‘Doji’ candlestick pattern. The Nifty’s daily RSI has recently risen from the oversold zone. The index, however, has been trading below the 20, 50, 100, and 200 daily moving averages, indicating a negative fundamental trend (DMA).
On the weekly charts, the Nifty has likewise been holding the lower top and lower bottom forms. When Nifty crossed the 15,750 levels, it signalled a new collapse. In the event of a pullback, the prior support level of 15,750 is projected to act as resistance.
The amount of stocks over their 200 DMA is one of the breadth indicators we’ve been following. Currently, 14 percent of NSE500 equities are trading above their 200-day moving average. We witnessed breadth bottom off once the figure reached 13-14 percent in history, thus this metric has already reached its lowest range. The market bottomed out between 2016 and 2018, when the proportion of equities above the 200-day moving average hit 14%. This indicator has previously served as a trend reversal indication, and it should be actively monitored.
Pullbacks are part of bearish markets, according to the technical data outlined above. If the Nifty manages to stay above 15,190, there’s a significant probability it’ll stage a pullback rebound towards 15,700. However, given the current trajectory, rallies should be used to reduce long-term commitment. Nifty might fall to the next supports of 14,800 and 14,366 if it falls below 15,190.
Here is one buy call and two sell calls for next 2-3 weeks:
SRF: Sell | LTP: Rs 2,135.6 | Stop-Loss: Rs 2,242 | Target: Rs 1,985-1,910 | Return: 7-10 percent
The stock has broken through the key support of its 200-day exponential moving average (EMA) and has now closed below it for two sessions in a row. On the daily charts, the stock price has broken below the Bearish Head and Shoulder pattern. With negative divergence, the monthly relative strength index (RSI) has departed the overbought zone.
The stock is on the cusp of breaking out of a six-month consolidation pattern. On daily and weekly charts, indicators and oscillators have gone negative. We propose selling SRF in two tranches, the first at current market price and the second at Rs 2,200, with targets of Rs 1,985 and Rs 1,910, respectively, with a stop-loss of Rs 2,242.
Deepak Nitrite: Sell | LTP: Rs 1,754 | Stop-Loss: Rs 1,841 | Targets: Rs 1,631-1,570 | Return: 7-10 percent
On the daily charts, the stock has been making lower peaks and lower bottoms. The stock is trading below its daily moving averages of 20, 50, 100, and 200. (DMA). On the daily charts, it broke down below the bearish “Flag” pattern.
Chemical firms have begun to lag behind the benchmark index. Deepak Nitrite should be sold in two tranches, one at current market price and the other at Rs 1,810, with goals of Rs 1,631 and Rs 1,570, respectively, with a stop-loss of Rs 1,841.
Infosys: Buy | LTP: Rs 1,414 | Stop-Loss: Rs 1,343 | Targets: Rs 1,513-1,590 | Return: 7-12 percent
The stock outpaced the benchmark index on June 20, 2022, and crossed its 5-day EMA intraday. On the daily chart, the RSI has been moving up with bullish divergence.
On the short-term chart, the Nifty IT index appears to be severely oversold. From present levels in the Nifty IT Index, a pullback rebound cannot be ruled out. We advise purchasing Infosys in two tranches, one at current market price and the other at Rs 1,365, with goals of Rs 1,513 and Rs 1,590, respectively, with a stop-loss of Rs 1,343.