On the September 15, the benchmark index Nifty50 finally witnessed a breakout on the higher side of a narrow range consolidation pattern and registered its new lifetime high of 17,532.70. Nifty50 was trading in a band of almost 200 points from the last six trading sessions without giving any meaningful indication.
Prices have given a smaller degree horizontal trend line breakout on the daily chart and the earlier resistance of 17,300 will act as the next immediate support for the prices as per the change of polarity concept.
From the last three trading sessions, we have seen a consistency in the advance-decline ratio 2:1 where advancing stocks were having the upper hand even in the sideways trend; it clearly indicates the accumulation phrase for the majority of the stocks.
Even FII data of September 13 & 14 have hinted a strong accumulation in the frontline stocks as we have seen almost Rs 2,000 crore of buying.
Momentum oscillator RSI (14) is continuously sustaining above 70 levels and currently hovering between 75 – 80 levels on the daily interval. An indicator or oscillator can remain in the overbought zone for a longer duration in the bull market and any dip of an RSI near its previous low can be utilized for a buy-on dips strategy.
The support for the Nifty is placed near the low of the consolidation zone which is placed at 17,250 levels and the immediate resistance for the prices is likely to cap near 17,800 levels.
Here are three buy calls for the next three-four weeks:
Max Financial Services: Buy | CMP: Rs 1,130.85 | Target: Rs 1,210 | Stop Loss: Rs 1,085 | Return: 7 percent
The prices were trading in an ascending triangle formation since past two months and have formed a trend line resistance at Rs 1095 levels.
MFSL has broken out of an ascending triangle pattern at Rs 1,115 levels on September 14 and the prices have registered a decisive breakout that suggests a change in the trend from sideways to upside.
Stock is trading above its 21, 50 & 100-day exponential moving averages on daily time frame, which is positive for the prices in the near term.
MACD indicator is reading above its centerline with positive crossover above its signal line. Momentum oscillator RSI (14) is reading above 60 levels which indicates positive momentum will like to continue ahead.
Hero MotoCorp: Buy | CMP: Rs 2,875 | Target: Rs 3,050 | Stop Loss: Rs 2,788 | Return: 6 percent
The prices were trading in a lower high lower low formation since June 9 and have formed a bottoming formation near Rs 2,660 levels in the last week of August.
Hero MotoCorp has formed an inverted head & shoulder pattern and has given a breakout above its neckline which is placed at Rs 2,820 levels on September 14.
The counter has also shown an above average volume during the breakout which indicates a price volume breakout confirmation.
The MACD indicator is reading above its centerline with a positive crossover above its signal line. Momentum oscillator RSI (14) is reading above 60 levels which indicates positive momentum will like to continue ahead.
HPCL: Buy | CMP: Rs 275.70 | Target: Rs 294 | Stop Loss: Rs 267 | Return: 6.60 percent
On the daily chart, the stock took support near its 21-day exponential moving average and bounced back with volume confirmation.
HPCL has given an inverted head & shoulder pattern breakout on the daily interval on 15th Sept and prices have been able to close above its neckline support.
Plus DI is placed above the minus DI while the ADX line has started slopping upwards, indicating the stocks is likely to gather momentum in the coming days. Daily RSI has shown a trend line breakout which is bullish development for the short term.
On the current juncture, this stock has once again picked up momentum above the key resistance level of Rs 272 along with rising volumes.
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