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Buy these two shares for gains while bulls attempt a comeback, resistance at 17650

The market is in an attempt of a comeback from the lows and further sustainable up-move from here could bring bulls into a driver’s seat.

Buy these two shares for gains while bulls attempt a comeback, resistance at 17650
A small positive candle was formed on the daily chart, that placed beside the long positive candle of the previous session.

By Nagaraj Shetti

After showing a sustainable upside bounce on Tuesday, the Nifty shifted into a consolidation with a positive bias on Wednesday and closed the day higher by 27 points. After opening on a negative note, the market showed intraday volatility throughout the day. Upside momentum got strengthened during later part of the day and the Nifty closed near the highs.

A small positive candle was formed on the daily chart, that placed beside the long positive candle of the previous session. Technically, this pattern indicates a range-bound movement in the market after a pullback rally from the lower supports. This also reflects a lack of selling interest in the last couple of sessions after a sharp reversal on the downside on 19 and 22 August. The Nifty placed at the 23.6% Fibonacci support as well as 20day EMA around 17340 levels and the positive chart pattern like higher tops and bottoms is still intact. Hence, we expect further upside in the coming session. However, if the short covering doesn’t emerge in the next 1-2 sessions, the market could face another round of selling pressure.

The market is in an attempt of a comeback from the lows and further sustainable up-move from here could bring bulls into a driver’s seat. Immediate resistance is to be watched at 17650 and a sustainable move above this area is expected to pull Nifty towards another hurdle of 17850 levels in the short term.

Buy APCOTEX INDUSTRIES LTD

After showing a range-bound action in the last 5-6 weeks, the stock price (APCOTEXIND) has witnessed a sharp upside breakout of the hurdle of Rs 585 in this week and is trading higher. The larger degree of higher tops and bottoms is active on the weekly chart which signals an intermediate uptrend is intact. The volume has expanded during the upside breakout in the stock price and weekly RSI shows a positive indication.

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Buying can be initiated in APCOTEXIND at CMP (625), add more on dips down to Rs 600, wait for the upside targets of Rs 690 and Rs 760 in the next 3-5 weeks. Place a stop-loss of Rs 580.

Buy ACTION CONSTRUCTION EQUIPMENT LTD

After showing a larger range bound action over the last few months, the stock price (ACE) has shown a decisive upside breakout of the range at Rs 245 levels during this week. The stock price has also moved above the crucial overhead resistance of down sloping trend line at Rs 240 and closed higher on Wednesday. The pattern of volume and RSI indicates a further strengthening of upside momentum in the stock price ahead.

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Buying can be initiated in ACE at CMP (254.30), add more on dips down to Rs 245, and wait for the upside targets of Rs 280 and Rs 307 in the next 3-5 weeks. Place a stop-loss of Rs 237.

(Nagaraj Shetti is a Technical Research Analyst at HDFC Securities. Views expressed are the author’s own. Please consult your financial advisor before investing.)

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