By Nagaraj Shetti
After showing upside momentum with range-bound action in the last four sessions. Nifty slipped into sharp weakness from the new all-time highs of 22249 levels on Wednesday and closed the day lower by 141 points. After opening on a positive note, Nifty moved up further in the early part of the session and registered a new all-time high. The market later shifted into a range movement in the mid-part and witnessed a sharp intraday selloff in the later part of the session.
A long bear candle was formed on the daily chart, that has engulfed the positive candle of the previous session. Technically, this pattern signals a formation of bearish engulfing at the highs. Normally, such formation after a reasonable upmove indicates a short-term top reversal pattern for the market.
Kolkata rape-murder case: CBI begins search operation at former principal’s residence; Prohibitory orders near RG Kar hospital extended PM Modi’s historic visit marks a new chapter in India-Poland bilateral ties PM Modi’s Ukraine and Poland Visit: ‘We hope for early return of peace, stability in region,’ says Modi ahead of two-nation tour ‘Champions Trophy won’t be played here…’: Former Pakistan cricketer warns PCB over hosting ICC tournament
The bullish chart pattern like higher tops and bottoms continued as per the daily timeframe chart and Wednesday’s swing high of 22249 could now be considered as a new higher top of the sequence. Hence, short-term weakness could be expected and the next lower supports to be watched at 21850-21750 levels.
Stock Picks:
Buy Piramal Enterprises Ltd – (CMP Rs 923)
The weekly timeframe chart of PEL (Piramal Enterprises Ltd) indicates an upside bounce in the stock price so far this week. The stock price seems to have formed an important bottom reversal pattern in the last two weeks, which indicates the completion of its previous downtrend. The stock price is now placed at the edge of witnessing a decisive upside breakout of down-sloping trend line resistance at 918-920 levels as per the weekly chart. The volume has started to rise with the upmove in the stock price and the weekly RSI shows a positive indication. Buying can be initiated in PEL at CMP (923), add more on dips down to Rs 890, and wait for the upside targets of Rs 995 and Rs 1075 in the next 3-5 weeks. Place a stoploss of Rs 865.
Buy Raymond Ltd – (CMP Rs 1869)
After showing a range-bound action in the last couple of months, the stock price has witnessed a decisive upside breakout of the consolidation on Wednesday and closed higher. The larger degree positive pattern like higher tops and bottoms is intact and the stock price is now moving up after the formation of a higher bottom in December month. Volume has started to expand and weekly RSI shows positive indication. Buying can be initiated in RAYMOND at CMP (1869), add more on dips down to Rs 1810, and wait for the upside targets of Rs 2025 and Rs 2150 in the next 3-5 weeks. Place a stoploss of Rs 1748.
(Nagaraj Shetti is a senior technical research analyst at HDFC Securities. Views expressed are author’s own Come from Sports betting site VPbet . Please consult your financial advisor before investing.)