By Nagaraj Shetti
After showing sharp upside bounce from the lows on Tuesday, the strong upside momentum continued in the market on Wednesday and the Nifty closed the day with hefty gains of 293 points. Another long bull candle was formed on the daily chart with gap up opening. The upmove of the last two sessions has erased the negative sentiment created by last Friday and this Monday. This is positive indication for the short term.
Nifty is currently placed at the crucial overhead resistance of 17500-17550 levels, which is previous swing highs and lows as per the concept of change in polarity. This area has proved to be a crucial value area as the Nifty moved down sharply below this area for two occasions in the past. Hence, a sustainable move above this resistance zone is likely to open further sharp upmove in the short term.
The bulls have gained upside momentum in the last two sessions and the market is now placed at the important juncture of hurdle. A decisive move above 17550-17600 levels could open further upside towards 18K mark in a quick period of time. Any failure to sustain above this area is likely to trigger weakness from the highs towards the low of 17250-17200 levels in the near term.
Buy SOBHA Ltd- (CMP Rs 857)
As per the weekly timeframe chart of SOBHA Ltd indicate a sustainable uptrend over the last many months. The stock price has moved up consistently as per the positive sequence of higher tops and bottoms on the weekly chart. The recent swing low of Rs 756 could be considered as a new higher bottom of the sequence. The cluster support of up sloping trend line and weekly 10/20 period EMA are intact and one may expect upside momentum to pick up from here. Weekly 14 period RSI is placed at 60 and its turn up from here could mean further strengthening of upside momentum for the stock price ahead.
Buying can be initiated in SOBHA at CMP (857), add more on dips down to Rs 822, wait for the upside target of Rs 945 in the next 3-4 weeks. Place a stoploss of Rs 795.
Buy Minda Industries Ltd – (CMP Rs 919.05)
The stock price (MINDAIND) has been in a sustainable uptrend over the last many months. It moved up as per the positive sequence of higher tops and bottoms. Recent minor downward correction seems to have completed and the stock price has started to move up from the higher bottom. The support of 10week EMA is intact and one may expect further upside from near this support. Weekly RSI and weekly DMI/ADX oscillator’s shows positive indication.
Buying can be initiated in MINDAIND at CMP (919.05), add more on dips down to Rs 880, wait for the upside target of Rs 1020 in the next 3-4 weeks. Place a stoploss of Rs 855.
(Nagaraj Shetti is a Technical Research Analyst at HDFC securities. Views expressed are the author’s own. Please consult your financial advisor before investing.)