By Vinay Rajani, CMT, senior technical and derivative analyst at HDFC Securities
Trend of Nifty 50 is expected to remain down till it remains below 22,300, which happens to be 61.8 percent Fibonacci retracement of the entire fall seen from all time high of 22,526 to 21,906, the recent low. Nifty has been finding support near 21,900 for last four trading sessions. The 50-day EMA (exponential moving average), currently placed at 21,916, seems to be acting as a strong support for the Nifty.
Therefore, any level below 21,850 could bring back the bearish momentum in the Nifty. Indicators and oscillators have turned bearish on short term charts of Nifty. Below 21,850, Nifty could slide down to next support of 21,500.
Bank Nifty has been falling for last 6 trading sessions. Short term resistance for the same is expected near 47,200. Positional support for Bank Nifty is seen at 45,660. A level below 45,660 would result in to bearish breakout for medium term in Bank Nifty.
The NSE Smallcap100 and Microcap250 Indices turned bearish on medium term charts and it is advisable to remain very selective and vigilant in trading mid and smallcaps.
Brent crude has broken out from crucial resistance, which could hurt the Indian equity market sentiment. World Market Index reached the crucial support, break below which would result in short term breakdown. We advise traders to hold Nifty longs with 21,850 stop-loss.
Here are three buy calls for the short term:
Kotak Mahindra Bank: Buy | LTP: 1,738 | Stop-Loss: Rs 1,667 | Target: Rs 1,820 | Return: 5 percent
On week ended March 2, 2024, the stock registered bullish “Hammer” candlestick pattern on the weekly charts. The stock has been consolidating in the narrow range for last 5 trading sessions. Indicators and oscillators have been showing strength in the current uptrend.
Tata Steel: Buy | LTP: Rs 150 | Stop-Loss: Rs 141 | Target: Rs 162 | Return: 8 percent
After a healthy correction of 13 percent, the stock found support on its 50-day SMA (simple moving average) and bounced back. On March 18, the stock surged more than 5 percent with jump in volumes.
Stochastic oscillator has exited the oversold zone, which indicates probable bullish trend reversal for the stock
Maruti Suzuki India: Buy | LTP: Rs 11,636 | Stop-Loss: Rs 11,100 | Target: Rs 12,400 | Return: 7 percent
Maruti is on the verge of breaking out from the consolidation, which held for last 5 consecutive weeks. Stock is also very near from its all-time high of Rs 11,730.
The stock has remained resilient in the recent market correction. It has also been outperforming the auto index. It is placed above all important moving averages, indicating bullish trend on all time frames.
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