The Nifty seems to have halted the higher-high higher-low pattern on the monthly time frame after testing the 15,431-mark.
On the weekly timeframe, we saw a sharp bounce back from the 14,248, which also happens to be placed near the March 25, 2021 low.
On the open interest front, huge participation and open interest addition is seen at 15,000 Calls. On the Put side, open interest addition and participation are seen at 14,300 and 14,000 Put contracts.
Thus, going ahead, we can expect Nifty's broader range to be between 15,000 and 14,000.
The ADX plotted on the weekly timeframe can be seen moving lower, indicating a lack of strength, as the index moves in a sideways range.
On the upside, 14,616 will act as a make-or-break level. If the index manages to move above this level, we may see the index move higher towards 15,000-15,050 and eventually towards 15,220.
Key support levels to watch out for in the shortterm are 14,248 (weekly low), followed by 13,660 (38.2 percent retracement level of the rise from 10,790-15,431).
If the index breaches and closes below 14,248, it can test 13,660.
Here are three buy calls for the next three-four weeks:
IPCA Laboratories | LTP: Rs 2,100 | Target price: Rs 2,783 | Stop loss: Rs 2,020 | Upside: 33%
This stock, on the monthly timeframe, can be seen moving higher after bouncing off the Rs 1,785-mark.
On the weekly timeframe, we can see that the stock broke above the upper range of the nine-week consolidation and the 20-week SMA and tested a high of Rs 2,215.
On the indicator front, RSI plotted on the weekly timeframe can be seen placed above the 50-mark and moving higher.
The immediate resistance is placed at Rs 2,416-2,460 (38.2 percent extension level of the rise from Rs 844-Rs 2,460 projected from Rs 1,785 and previous swing high) followed by Rs 2,783 (61.8 percent extension level of the rise from Rs 844-Rs 2,460 projected from Rs 1,785).
The key support levels are Rs 2,020 (multiple touchpoint level) followed by Rs 1,785 (recent swing low).
We expect the stock to move higher and test the Rs 2,460-mark. If the prices manage to sustain above this level, we may see further up move till Rs 2,783.
One can buy the stock at the current level with a target of Rs 2,416-2,460 and second target of Rs 2,783.
On the weekly timeframe, this stock can be seen moving in a range for about 15 weeks and has been sustaining above the Rs 665-660 level on a closing basis.
On the indicator front, we can see that the RSI plotted on the weekly timeframe is placed above the 50-level and moving higher.
The stock bounces off the support level, indicating the presence of bullish momentum.
It can be seen moving higher towards the upper Bollinger band after sustaining above the 20-week simple moving average (SMA).
Key resistance is placed at Rs 773 (61.8 percent extension level of the rise from Rs 555.95-Rs 746 projected from Rs 665), followed by 815 (78.6 percent extension level of the rise from Rs 555.95-Rs 746 projected from Rs 662).
The key level to watch out for on the downside is Rs 680 (weekly low), followed by Rs 665-660 (support zone).
Looking at the price action and the technical parameters mentioned above, we expect prices to move higher towards Rs 746 followed by Rs 773.
If the prices move below Rs 680, we might see the stock move lower towards Rs 660 mark.
One can buy the stock at the current levels for a target of Rs 773 and the second target of Rs 815.
Marico | LTP: Rs 424.50 | Target price: Rs 479 | Stop loss: Rs 400 | Upside: 13%
For the last two months, the stock has been forming a higher-high higher- low pattern after bouncing off the Rs 380-mark.
On the weekly timeframe, we can see that the stock has been moving higher for the last five weeks. This up move took the prices from Rs 379 to Rs 424.
MACD plotted on the daily timeframe can be seen moving above the zero line, indicating the presence of a bullish trend. RSI plotted on the daily timeframe is placed above the 50 level.
Key resistance is placed at Rs 455 (38.2 percent extension level of the rise from Rs 234 to Rs 434 projected from Rs 379), followed by Rs 479 (50 percent extension level of the rise from Rs 234-434 projected from Rs 379).
The key level to watch out for on the downside are Rs 406 and Rs 400 (support cluster) followed by Rs 379 (recent swing low).
We expect prices to move higher towards Rs 455, followed by Rs 479. One can buy the stock at the current levels with a target of Rs 455, followed by Rs 479.
(The author is a technical analyst at GEPL Capital)
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