By Nagaraj Shetti
The upside momentum continued in the market with range bound action on Wednesday and Nifty closed the day higher by 93 points. A reasonable positive candle was formed with a minor lower shadow, which indicates a comeback of bulls after a higher levels weakness of Tuesday.
Nifty is now placed at the resistance zone of around 15350-15450 levels (previous swing highs of Feb-March 21) and previously, the market has witnessed sharp profit booking from the highs in the past. Nifty not showing any sharp reversal from the highs so far could be a positive indication. As long as this strength of uptrend continues for the next 1-2 sessions, one may expect a decisive upside breakout of the hurdle at 15450 levels.
Wednesday’s new swing high at 15319 could open chances for a new higher top formation (as per the bullish sequence of higher tops and bottoms on the daily chart). But, we need confirmation by weakness from the highs to call this as a negative reversal pattern.
The short term trend of Nifty continues to be positive amidst rangebound movement. Now the market is placed at the crucial juncture of overhead resistance around 15350-15450 levels. If Nifty sustains around thee highs for the next couple of sessions, then that could open doors for an upper target of 15800 levels. Any profit booking from the hurdles could be a buy on dips opportunity for short term. Immediate support is placed at 15200-15150 levels.
Buy Bombay Burmah Trading Corpn. Ltd- (CMP Rs 1334.20)
After showing consolidation movement in the last few weeks, the stock price has moved up sharply in this week so far, as per weekly timeframe chart. We observe a sustainable upside breakout of the multi month down sloping trend line resistance around Rs 1260 in this week and the stock price is trading higher. Hence, one may expect a continuation of sharp trended upmove in the stock price for the near term. Weekly 14 period RSI is near its upper hurdle of 60. Its sustainable move above 60 could mean further strengthening of upside momentum in the stock price.
Buying can be initiated in BBTC at CMP (1334.20), add more on dips down to Rs 1285, wait for the upside target of Rs 1475 in the next 3-4 weeks. Place a stoploss of Rs 1250.
Buy Jyothy Labs Ltd – (CMP Rs 157.10)
After showing consolidation in the last few weeks, the stock price (Jyothy Lab) has witnessed a sustainable upside bounce in this week and is trading at the highs. The stock price is currently forming a triangle type pattern and is advancing towards the upper end of a triangle at Rs 160 levels. As per this pattern, one may expect a decisive upside breakout of a triangle in the near term, which could open more upside for the stock price ahead. Weekly 14 period RSI shows positive indication and volume has started to rise during upmove in the stock price.
Buying can be initiated in Jyothy Labs Ltd at CMP (157.10), add more on dips down to Rs 150, wait for the upside target of Rs 173 in the next 3-4 weeks. Place a stoploss of Rs 146.
(Nagaraj Shetti is a Technical Research Analyst at HDFC securities. Views expressed are the author’s own. Please consult your financial advisor before investing.)