By Nagaraj Shetti
After showing weakness from the highs on Tuesday, Nifty slipped into declines amidst a range movement on Wednesday and closed the day lower by 97 points. After opening with a negative note, the market in an attempt to move up in the early part of the session. It failed to sustain the highs and showed declines in the mid to later part of the session. A small negative candle was formed on the daily chart with minor upper and lower shadow. Technically, this pattern indicates a consolidation movement in the market. After a sharp weakness in the 15th and 16th September, the market showing small range weakness could signal broader range movement. The market breadth was negative on Wednesday and minor weakness was seen in broad market indices like NSE midcap and small cap segments.
The short-term trend of Nifty continues to be choppy. The market is stuck within a broader high low range of 18100-17500 levels and the movement within the said range is expected for the next few sessions. Any decisive move beyond this range is likely to bring acceleration in the momentum on either side.
Buy Sterling and Wilson Renewable Energy Ltd (SWSOLAR)
The weekly time frame chart of Sterling and Wilson Renewable Energy Ltd (SWSOLAR) indicates an upside bounce within a range movement of Rs 280-312 levels over the last couple of months. Presently, the stock price has witnessed an upside breakout of the upper range at Rs 312 levels. Formation of long bull candle on the weekly chart so far signal strengthening of upside momentum after a range movement of previous weeks. Volume has started to expand during upside breakout in the stock price and weekly RSI shows positive indication. Buying can be initiated in SWSOLAR at CMP (320), add more on dips down to Rs 307, wait for the upside targets of Rs 350 and Rs 380 in the next 3-4 weeks. Place a stoploss of Rs 298.
Buy Rhi Magnesita India Ltd (RHIM)
After showing range bound movement in the last couple of weeks the stock price (RHIM) has witnessed a sharp upside bounce in this week and is trading higher. The stock price is now in an attempt of upside breakout of the hurdle of previous top of April 22 at Rs 675 levels. Hence, further upside from here could open a sharp upside momentum for the stock price ahead. Volume and weekly RSI shows positive indications. Buying can be initiated in RHIM at CMP (686.80), add more on dips down to Rs 660, wait for the upside targets of Rs 740 and Rs 795 in the next 3-5 weeks. Place a stoploss of Rs 640.
(Nagaraj Shetti, Technical Research Analyst, HDFC Securities. Views expressed are the author’s own.)