The Nifty Index Shows Positive Momentum for Future Gains.
Introduction
The Nifty index, a prominent benchmark index of the National Stock Exchange (NSE) in India, has shown a positive trend with potential for further gains in the future. This article will provide an analysis of the current market situation, identify key support and resistance levels, and offer three buy calls for the next 2-3 weeks.
Market Analysis
Rising Wedge Price Pattern
On the weekly charts, the stock market has been forming a rising wedge price pattern since March 2023. This pattern suggests a potential continuation of the upward movement in the Nifty index. Traders and investors should keep an eye on this pattern as it indicates a bullish trend.
Uptrend Confirmation
On the daily time frame, the Nifty index has been forming higher highs and higher lows on a swing basis, confirming the presence of an uptrend. This pattern further strengthens the positive outlook for the index.
Support and Resistance Levels
The Nifty index has shown consistent respect for the support level of the 13-day Exponential Moving Average (EMA), currently at 18,713, since April 2023. This indicates the continuation of a bullish trend. Additionally, the index has a strong support level at 18,460, followed by 18,200. On the higher side, crucial levels to watch out for are 19,000, followed by 19,366.
Positive Momentum Indicator
The momentum indicator Relative Strength Index (RSI) has sustained above the 60 level on all time frames, including daily, weekly, and monthly. This indicates a strong positive momentum for the Nifty index. Traders and investors can interpret this as a sign of the index's potential for further gains.
Buy Calls for the Next 2-3 Weeks
Based on the analysis of the market situation, here are three buy calls for the next 2-3 weeks:
1. Tube Investments of India
- Buy | LTP: Rs 3,220.45
- Stop-Loss: Rs 2,990
- Target: Rs 3,750
- Return: 16 percent
Tube Investments of India has exhibited a notable acceleration in its overall trend, as evidenced by the ascending trend line. Furthermore, there has been a recent breakout of the Rounding Bottom pattern, indicating a potential continuation of the upward movement. The momentum indicator RSI on the weekly timeframe has also been steadily rising and remains above the 65 level, indicating positive momentum in the stock. Based on closing prices, it is anticipated that the prices will ascend towards the target level of Rs 3,750, with a strict stop-loss at Rs 2,990.
2. KPR Mill
- Buy | LTP: Rs 676.10
- Stop-Loss: Rs 630
- Target: Rs 765
- Return: 13 percent
After experiencing a decline from its peak in January 2022, KPR Mill has established a strong support level around Rs 500, forming a solid base. Recent price action has demonstrated a breakout of the Rectangle pattern, which was preceded by a short fall in the pattern, indicating enthusiasm behind the breakout. The breakout is accompanied by higher volumes, confirming its validity. Additionally, the RSI on the weekly timeframe has experienced a breakout, affirming the presence of positive momentum in the stock. Based on analysis, further price appreciation is anticipated, with a target level of Rs 765. Traders and investors are advised to implement a strict stop-loss at Rs 630, adhering to a closing basis.
3. APL Apollo Tubes
- Buy | LTP: Rs 1,391.40
- Stop-Loss: Rs 1,290
- Target: Rs 1,525
- Return: 10 percent
APL Apollo Tubes has made a fresh life high at Rs 1,398 and has sustained around that level, indicating a strong positive undertone of the stock. On the weekly charts, the stock has formed a CIP (change in polarity) formation at Rs 1,100 levels, confirming the bullish structure. On the daily timeframe, the stock has given a Saucer pattern breakout with volume confirmation, showing the strong participation of the bulls. The momentum indicator RSI on the weekly timeframe is rising and sustaining above 65 levels, reflecting the presence of positive momentum. It is expected that the prices will move higher towards the target level of Rs 1,525, with a strict stop-loss at Rs 1,290 on a closing basis.
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Conclusion
In conclusion, the Nifty index shows a positive trend with the potential for further gains. Traders and investors can utilize the support and resistance levels mentioned in this article to make informed decisions. Additionally, the three buy calls provided offer opportunities for potential returns in the next 2-3 weeks. Remember to conduct thorough research and consider your risk tolerance before making any investment decisions.