Buy these two stocks to pocket gains as Nifty looks to breach near-term resistance
April 29, 2021 8:28 AM
Nifty has bounced back as per weekly timeframe chart and formed a long bull candle so far.
The short term trend of Nifty continues to be positive.
By Nagaraj Shetti
After showing a sign of strength with upside momentum on Tuesday, Nifty demonstrated another sharp upmove on Wednesday and closed the day higher by 211 points. After opening with upside gap of 57 points, Nifty shifted into a sustained upmove that continued for the entire session. Intraday consolidation or minor dips in between have been used as buy on dips opportunity for the day. The opening upside gap remains unfilled.
A long bull candle was formed, that closed at the edge of the crucial overhead resistance at 14900 levels (resistance as per change in polarity and previous swing highs). Though Nifty is placed at the key hurdle, there was no sign of profit booking from near the resistance on Wednesday. This is a positive indication and signal more upside in the short term.
After the false downside breakout of the lower range of 14200 levels on 22nd April, Nifty displayed strength on the upside and has almost reached the upper trajectory of the range pattern at 14900 levels. Hence, a sustainable move above this hurdle could open the next upside target of around 15200-15300 levels in the near term.
Nifty has bounced back as per weekly timeframe chart and formed a long bull candle so far. After the formation of doji candles in the previous three weeks during decline, one may now expect a formation of long bull candle as per weekly timeframe chart, by week’s close.
The short term trend of Nifty continues to be positive. After the display of strength to move above the hurdle, one may expect present upside resistance (14900) to be broken decisively on the upside in the short term. Any intraday consolidation or minor weakness from near the hurdle could be a buy on dips opportunity. Immediate support is placed at 14750.
Buy JK Tyre & Industries Ltd- (CMP Rs 116.60)
The broader downward trend in this Tyre stock (JKTYRE) of the last few months seems to have reversed on the upside as per the weekly timeframe chart. After shifting into a consolidation pattern recently, the stock price witnessed sustainable up-move in the last few sessions. The stock price is currently placed to show a decisive upside breakout of the downward sloping trend line resistance around Rs 118-119 levels. Hence, a sustainable move above Rs 119 levels could open a sharp trended up-move in the stock price in near term. Weekly 14 period RSI shows a positive indication.
Buying can be initiated in JKTYRE at CMP (116.60), add more on dips down to Rs 112, wait for the upside target of Rs 130 in the next 3-4 weeks. Place a stoploss of Rs 109.
After showing a larger range bound action in the last few weeks, the stock price (Heritage Foods Ltd) has witnessed a sharp upside bounce from the last week. The stock price was moving in a larger triangle type pattern in the last many months and has witnessed an upside breakout of the triangle at Rs 355 levels recently. This is a positive indication and one may expect sharp up-move in the near term. Weekly 14 period RSI moved above 60 levels and volume has started to expand while the stock price shows upside breakout of the hurdle.
Buying can be initiated in Tata at CMP (377.50), add more on dips down to Rs 360, wait for the upside target of Rs 420 in the next 3-4 weeks. Place a stoploss of Rs 348.
(Nagaraj Shetti is a Technical Research Analyst at HDFC securities. The views expressed are the author’s own. Please consult your financial advisor before investing.)