By Vidnyan Sawant, AVP – Technical Research at GEPL Capital
In the Monthly Charts: The Index recently broke its previously strong bullish pattern by slipping below the critical support level at 19,200, which had held steady for the past four months. This breach has given rise to a “lower top lower bottom” pattern, suggesting a bearish sentiment for the medium term.
Moving to the Weekly Timeframe: The index exhibited a significant bearish signal as it formed a sizable bearish candle and broke through the previous swing low. This solidifies the bearish trend.
Delving into the Daily Timeframe: After a pronounced bearish trend in recent days, the index has entered a rangebound phase and seems to have found support around its 200-day exponential moving average (EMA) at approximately 18,830.
Key support levels for the index can be found at 18,830, where the 200-day EMA acts as a strong foundation, as well as additional support levels at 18,640 and 18,460. On the other hand, potential resistance levels may come into play around 19,350, followed by 19,560, and the swing high at 19,850.
The relative strength index (RSI), a vital momentum indicator, consistently remains below the 50 level on both the daily and weekly charts, indicating a strengthening negative momentum.
Taking all these factors into account, the outlook for the Nifty index seems to favor a bearish scenario. There’s an anticipation of further downward movement in the Nifty, potentially reaching down to the 18,460 level if it breaks the 18,830 support. However, this bearish view would be nullified if the index manages to sustain levels above 19,560.
Three Top Stock Picks for the Next 2-3 Weeks
Macrotech Developers:
Buy | Last Traded Price (LTP): Rs 850.25 | Stop-Loss: Rs 810 | Target: Rs 955 | Potential Return: 12 percent
In a volatile market, the Nifty Realty sector stands out for its stability and leadership qualities. Among the sector’s top performers, Lodha has consistently maintained its outperformance, hovering near all-time highs.
Since February 2022, Lodha’s uptrend has remained intact during a consolidation phase, indicating its resilience and potential for further growth. The stock has consistently stayed above crucial moving averages, such as the 12 & 26-week EMA, providing strong support for its upward trajectory.
The weekly RSI demonstrates a notable range shift, reflecting rising positive momentum in the stock’s price.
Looking ahead, we anticipate that the stock will continue its upward journey, with a target of Rs 955. It’s crucial to maintain the stop-loss at Rs 810, strictly on a closing basis.
Tata Consumer Products:
Buy | Last Traded Price (LTP): Rs 911.25 | Stop-Loss: Rs 872 | Target: Rs 1,010 | Potential Return: 11 percent
Tata Consumer Products’ stock has undergone a well-structured correction, both in terms of time and price, following its peak around Rs 872 levels. This disciplined correction phase is characterized by the absence of lower lows and lower highs.
The previous resistance level at Rs 865, in place since September 2021, has now transformed into a reliable support level, signaling a prevailing positive sentiment in the stock.
Additionally, ratio charts comparing Tata Consumer Products to the Nifty 50 clearly indicate a significant breakout, reinforcing the stock’s consistent market outperformance.
Price action for Tata Consumer Products has found robust support around Rs 872 levels, further backed by the 12-week exponential moving average (EMA), providing dynamic support. This robust support structure confirms a solid foundation around this critical level.
Looking ahead, we anticipate that the stock will continue its ascent, targeting Rs 1,010. It’s important to maintain the stop-loss at Rs 872, strictly on a closing basis.
Godrej Properties:
Buy | Last Traded Price (LTP): Rs 1,716 | Stop-Loss: Rs 1,500 | Target: Rs 2,125 | Potential Return: 23 percent
Godrej Properties is exhibiting strong positive signals for the medium to long term. Following a robust bull run since April 2023, with a surge from Rs 1,000 levels, the stock has entered a consolidation phase over the past four months while maintaining its bullish structure, indicating a positive outlook.
On the weekly charts, a notable development is the formation of a change-in-polarity (CIP) pattern at Rs 1,500 levels, followed by an upward move, confirming a bullish sentiment.
A detailed analysis of the daily charts reveals that Godrej Properties has consistently traded above key moving averages, including the 50, 100, and 200-day simple moving averages. Furthermore, the stock has formed a bullish higher top higher bottom pattern, underscoring the strength of the ongoing bullish trend.
The RSI, a key momentum indicator, has consistently remained above 55 across all time frames, whether daily, weekly, or monthly charts, and is on an upward trajectory, affirming a durable and consistent positive momentum.
Looking forward, we anticipate that Godrej Properties will likely continue its upward trajectory, with a target of Rs 2,125. It’s advisable to implement a stop-loss at Rs 1,500 on a closing basis to manage potential risks.
