By Om Mehra, technical analyst at SAMCO Securities
On March 19, the Nifty sharply declined by 1.08 percent to close at 21,817.45, breaking its rising trendline and moving below the previous swing low. The index also slipped below the 50 DMA (day moving average), with several of its constituents nearing 52-week lows.
Each attempt at recovery after forming a weekly Bearish Engulfing pattern has resulted in a sell-off. Nifty IT stocks were notably weaker. Long-term support in Nifty is expected at 21,500 followed by 21,300, with resistance at 22,200.
Meanwhile, Bank Nifty has seen seven red consecutive trading sessions and is just holding above 100 DMA. Private banking stocks are struggling to provide support while the Nifty PSU Index weakens on the weekly chart. A weekly close below 46,000 for Bank Nifty would signify a weaker trend and potentially test 45,000 levels.
Conversely, crossing 47,300 could signal a resumption of the uptrend on the Bank Nifty.
Here are three buy calls for the short term:
Shoppers Stop: Buy | LTP: Rs 776 | Stop-Loss: Rs 735 | Target: Rs 850 | Return: 9.5 percent
After a decent correction, the stock revealed a strong recovery, forming a sturdy base around Rs 730 levels. The stock is currently trading above the 20 SMA (simple moving average) indicating positive momentum. The daily chart reveals price is ticking up with a rise in volumes. The relative strength index (RSI) is gradually inching higher suggesting bullishness in stock.
Hence, based on the above technical structure, one can initiate a long position at CMP Rs 776.55 for a target price of Rs 850. The stop-loss can be kept at Rs 735.
Global Health: Buy | LTP: Rs 1,210 | Stop-Loss: Rs 1,130 | Target: Rs 1,310 | Return: 8 percent
The daily chart of Global Health (Medanta) suggests that the stock has found support at the 100 DMA, with the previous resistance now acting as support. The RSI is recovering from lower levels, indicating improving strength.
Also, there has been a surge in the delivery-based trading percentage in the previous trading session. A breakout above the Rs 1,218 level could attract significant buying interest and the price could inch up higher.
Hence, based on the above technical structure, one can initiate a long position at CMP Rs 1,210 for a target price of Rs 1,310. The stop-loss can be kept at Rs. 1,130.
Oberoi Realty: Buy | LTP: Rs 1,360.50 | Stop-Loss: Rs 1,310 | Target: Rs 1,450 | Return: 6.6 percent
After a decent correction, the price is currently consolidating and has established a robust base around the Rs 1,320 level. The RSI has rebounded from lower levels, indicating renewed strength, and the price is maintaining above the 20 DMA (day moving average). A breakout above the falling trend line would likely resume bullishness in the stock.
Hence, based on the above technical structure, one can initiate a long position at CMP Rs 1,360 for a target price of Rs 1,450. The stop-loss can be kept at Rs. 1,310.
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