Nifty short-term uptrend looks intact, support at 17450; Buy these 2 stocks to pocket near-term gains

Though, Nifty placed at the highs, the short-term uptrend status remains intact and there are no signs of any reversal pattern unfolding at the higher levels.

Nifty short-term uptrend looks intact, support at 17450; Buy these 2 stocks to pocket near-term gains
This market action signals an inability of bulls to show follow-through up move above 17500 levels post upside breakout of small range on Monday. Image: Reuters

By Nagaraj Shetti 

The lackluster type movement continued in the market on Wednesday and NSE Nifty 50 index closed the day higher by 9 points. After opening with a positive note, the market was not able to sustain the morning gains soon after the opening and it slipped into weakness in the early part of the session. It later shifted into a minor upside recovery with narrow range movement, which continued for the rest of the session. A small negative candle was formed on the daily chart with minor lower shadow. This market action signals an inability of bulls to show follow-through up move above 17500 levels post upside breakout of small range on Monday. This could mean chances of more consolidation or possibility of minor selling pressure emerging from the highs.

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Though, Nifty placed at the highs, the short-term uptrend status remains intact and there are no signs of any reversal pattern unfolding at the higher levels. On any upside from here, the market could find strong resistance around 17800 levels. Immediate support is placed at 17450 levels

Stocks to buy

Buy Rain Industries |  CMP: Rs 197.80

The weekly time frame chart of this stock price (RAIN) signals a sharp upside bounce in the last few weeks. The present weekly pattern signals an important upside reversal after a down trend of January to June 22 period. The volume has started to expand now and daily/weekly RSI shows positive indications. Buying can be initiated in RAIN at CMP (197.80), add more on dips down to Rs 190, wait for the upside targets of Rs 215 and Rs 235 in the next 3-5 weeks. Place a stop loss of Rs 184.

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Buy IRCTC | CMP: Rs 673

The Railway catering stock (IRCTC) on the weekly chart has witnessed a sustainable upside bounce in this week. Presently, the stock price is in an attempt to move above the weekly hurdles of 10 and 20 EMA around Rs 638/667 respectively. Volume has started to expand during the present upside breakout. Daily 14 period RSI signal further strengthening of upside momentum in the stock price ahead. Buying can be initiated in IRCTC at CMP (673), add more on dips down to Rs 650, wait for the upside targets of Rs 730 and Rs 805 in the next 3-5 weeks. Place a stoploss of Rs 630.

(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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