Market momentum will stall only if Nifty slips below 11,460, bet on these 3 stock ideas

On the short-term scale, the ongoing momentum can stall only if the Nifty slips below 11,460. While the immediate hurdle remains at 11,800, the probable resistance zone, where it may face some headwinds and a strong confident close above it will propel it towards 12,100 in no time. The range for the week now stands at 11,800-11,500 and would only shift higher once the index surpasses 11,800 confidently.

With its implied volatility (IV) band squeezing again, which has been trending lower, a break below 14.60 would be another confirmation of a likely resistance breakout. Sector rotation has been healthy so far as the baton remains rotating within the core three sectors viz banks, IT and pharma while selective largecaps are still looking strong within the ongoing momentum, traders should retain their long-only stance until 11,440 and hold from hereon.

The short-term traders should revise their stops further higher towards 11,440 once it surpasses its recent swing resistance above 11,800. While investors should utilise rotational action to discover new avenues and opportunities as the major trend remains intact.

Here are three recommendations

Buy Berger Paints

Multi-months resistance breached as the stock close above the Rs 600-mark first time since February 2020. The recent breakout from the continuation pattern (Bullish Pennant) indicates a price target up to Rs 645. With its daily RSI yet to quote above the overbought zone, there seems to be quite a headroom available for the ongoing upmove to stretch its legs further. Trading longs should be maintained until Rs 586 holds for an initial pattern target up to Rs 645.

Buy Gati

For the last four years, the stock had been trending lower within a 'Falling Wedge' formation on its monthly scale. On its monthly scale itself the placement of its trend strength indicators viz. RSI & ADX combined raises the expectation of a change in trend. With its price action now mature to witness a breakout from its ongoing Falling Wedge pattern, positional as well as folio longs should be considered from hereon. We expect the stock to revisit its 52-week swing high level, which coincides with its 200-WEMA zone placed around Rs 76-79 zone. Trading longs should be considered with a stop below Rs 48 for an immediate target of up to Rs 66 followed by a positional target of Rs 76.

Buy United Spirits

The Bullish Harami pattern on its weekly scale concludes the ongoing zig zag corrective wave. Options data at the beginning of the series indicates strong bounds been placed at Rs 500-600. The rebound from the lower end of this support zone has matured into an accumulation pattern on its short-term scale, which could witness strong momentum once above Rs 535 zone. Trading longs should be maintained for the series with a stop below Rs 495 for a rebound back towards Rs 600 zone.

(Sacchitanand Uttekar is the DVP – Technical (Equity) at Tradebulls Securities.)