By Nagaraj Shetti
After showing range bound action in the last few sessions, Nifty shifted into a decent up move on Wednesday and closed the day higher by 127 points. After opening with a positive note, the market shifted into a range bound movement for the better part of the session. The buying emerged in the mid to later part of the session and Nifty closed near the highs.
A long bull candle was formed on the daily chart with a gap up opening. This indicates an attempt of upside breakout of minor range movement. Nifty formed a new swing high of 18,738 levels on Wednesday and closed near the highs. The Nifty is all set to move into all-time highs (above the high of 18,887 of 1st Dec 22) in the short term and that could possibly open sharp upside momentum for the market ahead.
Positive NSE Nifty 50 chart patterns like higher tops and bottoms continued as per daily chart and present up move is in line with the formation of new higher top of the sequence. But, there is no confirmation of any higher top reversal as of now. Immediate supports to be watched at 18,650 levels and the next overhead resistance is around 18,900 levels for the short term.
Stock Recommendations
Sterling and Wilson Renewable Energy
Buy | CMP: Rs 315.65
The downward correction of April-May month seems to have reversed the upside in the stock price of Sterling and Wilson Renewable Energy, as it has witnessed a decisive upside breakout in the last two weeks. Presently, the stock price is placed at the edge of upside breakout of the hurdle of down sloping trend line at Rs 315 levels. Hence, further sustainable upside from here could open sharp upside momentum for the stock price ahead. Volume and oscillators are showing positive indications.
Buying can be initiated in SWSOLAR at CMP (Rs 315.65), add more on dips down to Rs 302, wait for the upside targets of Rs 342 and Rs 370 in the next 3-5 weeks. Place a stop loss of Rs 292.
Motilal Oswal Financial Services
Buy | CMP: Rs 672.90
After showing range bound action in the last few weeks, the stock price has started to show a decisive upside breakout of the upper range around Rs 665-670 levels. After a series of negative chart patterns like lower tops and bottoms on the weekly chart, the stock price has shifted into positive patterns like higher tops and bottoms recently. This is a positive indication and suggests more upside ahead. Volume has begun to expand and daily RSI shows positive indication.
One may look to buy Motilal Oswal Financial Services shares at CMP (Rs 672.90), add more on dips down to Rs 645 and wait for the upside targets of Rs 725 and Rs 790 in the next 3-5 weeks. Place a stop loss of Rs 627.
(Nagaraj Shetti, Technical Research Analyst, HDFC Securities. Views expressed are author’s own. Please consult your financial advisor before investing.)