The Nifty formed a near-term bottom near its 200-day SMA (Daily SMA – 17,414) before rebounding nicely. However, there are multiple hurdles to higher levels, with 17,800 an immediate resistance and 18,000 a critical hurdle that any trend reversal needs to cross.
On the downside, 17,600 is an immediate support level, while 17,500-17,450 is a crucial support level.
Bank Nifty outperformed, but 41,650–42,000 is the critical supply zone. Above this, we can expect a rally towards the 42,750-43,000 area. On the downside, the 20-day moving average near 41,000 is an immediate support level, while 40,444 is a key support level.
We have seen short covering, and there is still room for further short covering, but the market needs new longs with the support of institutional investors.
In the short term, global cues will be important as markets focus on speeches from the Fed chairman.
Here are three buy calls for the next 2-3 weeks:
Cummins India: Buy | Last Traded Price (LTP): 1,629 | Stop-Loss: Rs 1,550 | Target: Rs 1,754 | Return: 8%
The counter broke out of a triangle pattern on the daily chart. After hitting a 52-week high, it retested the previous breakout level of Rs 1,550. The structure of the counter looks classic as it trades against all its important moving averages.
On the higher side, the stock is vulnerable to around Rs 1,666, above which we can expect a long-term rally above Rs 1,750, while on the lower side, Rs 1,550 is the key support for any correction.
HG Infra Engineering: Buy | Last Traded Price (LTP): Rs 764 | Stop-Loss: Rs 675 | Target: Rs 904 | Return: 18%
The counter witnessed a breakout from a long-term consolidation as it retested the previously broken Rs 650 level after hitting a fresh 52-week high.
On the upside, Rs 815 is a sensitive area. Above this, we can expect a move to levels above Rs 900 in the near term.
On the downside, Rs 675 is the main support during any correction.
The MACD (Moving Average Convergence Divergence) supports the current strength, while the momentum indicator RSI (Relative Strength Index) is also positive.
Power Mech Projects: Buy | Last Traded Price (LTP): Rs 2,388 | Stop-Loss: Rs 2,150 | Target: Rs 2,788 | Return: 16%
A classic uptrend in this counter saw the breakout of a triangle pattern on the daily chart with solid volume. It forms higher highs and higher lows in a shorter time frame. The overall structure of the counter is profitable as it is trading above all its important moving averages.
Most momentum indicators are in positive territory and support breakout action from this counter. If Rs 2,410 is an immediate hurdle, we can expect it to move towards levels above Rs 2,700. On the downside, Rs 2,150 will be a strong demand area.