After last week’s sharp up move, Nifty consolidated in a narrow range on May 24 to end the day with minor gains.
Last week, Nifty had broken out from the downward sloping channel on the weekly chart. The index had been trading in a consolidation zone for the last 3 months and the range had been 14,150-15,000. This range is now taken out on a closing basis and the market is all set to extend the gains.
Nifty has been forming higher tops and higher bottoms on daily charts. Daily RSI has also been registering higher tops and higher bottoms which confirms the bullish trend.
In the options segment, we have seen Put writing at 14,900-15,000 levels. This support level also coincides with the 20 day EMA which is currently placed at 14,860. Therefore, we believe that the bullish trend will remain intact till the Nifty is trading above 14,900 levels.
Bank Nifty was the leader in the recent up move of the market and we expect the same trend to continue.
Private Banks, PSU Banks and NBFC space should be on the radar for getting higher returns in the coming days.
Bank Nifty is expected to move towards the next targets of 34,918 and 35,985.
Nifty has surpassed the crucial resistance of 15,000. The market could see momentum buying in a short span of time.
Next upside targets of Nifty are seen at 15,432 and 16,000. Longs should be protected with 14,900 stop loss in Nifty and 34,000 in the Bank Nifty.
Nifty Midcap and Smallcap indices have outperformed Nifty in this calendar year so far. We expect their outperformance to continue for the coming weeks also.
Here are three buy recommendations from the mid and smallcap segment for the next 3-4 weeks:
RPSG Ventures | LTP: Rs 427.80 | Target price: Rs 515 | Stop loss: Rs 390 | Upside: 20%
This stock has broken out on the daily chart by surpassing the resistance of Rs 418 to close at the highest level since July 2019.
Volumes were sharply higher as compared to an average of the last ten days, indicating strength in the up move.
The stock has been forming a bullish higher top higher bottom candlestick pattern on the daily and weekly chart.
Plus DI is placed above the minus DI while the ADX line is placed above 25, indicating momentum in the current uptrend.
JMC Projects (India) | LTP: Rs 105.40 | Target price: Rs 125 | Stop loss: Rs 97 | Upside: 19%
This stock has broken out on the weekly chart to close at the highest level since the week ending November 15, 2019.
It has been forming a bullish higher top higher bottom pattern on the daily and weekly chart.
Plus DI is placed above the minus DI while the ADX line is placed above 25, indicating momentum in the current uptrend.
Moreover, infrastructure as a sector is looking good for the short term.
Blue Dart Express | LTP: Rs 6,060 | Target price: Rs 6,800 | Stop loss: Rs 5,700 | Upside: 12%
This stock has been forming a bullish higher top higher bottom candlestick pattern on the daily and weekly charts.
It has already broken out on the weekly chart by closing above the resistance level of Rs 5,845 with higher volumes.
Accumulation is going on in the stock where volumes have been higher on up days as compared to down days for the last few weeks.
Plus DI is placed above the minus DI while the ADX line is placed above 25, indicating the stock is likely to gather momentum in the coming days.
(The author is a technical research analyst at HDFC Securities)
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
