Nifty on monthly timeframe has been forming a higher high, higher low pattern, indicating that the trend of the benchmark index from a long-term perspective remains strongly bullish.
Coming down to the weekly chart, we can see that the index has been holding the 20-week simple moving average (SMA) since June 2020 and has been finding support near it in every correction.
On the options front (June 24, 2021 expiry), strong participation is seen at 16,000 Call options.
On the Put side, the highest open interest is seen at 15,500 strike. Thus, we can expect the broader range of the index to be 16,000-15,500.
On the indicator front, the stochastic plotted on the weekly and the daily timeframes can be seen forming a bearish crossover near the overbought level, indicating the bulls might be losing their hold on the trend.
A breach below 15,700 confirms the evening star pattern, and we might see the index fall to 15,538 (20-day SMA and also placed close to the previous week low).
If this level is breached we might see prices move lower towards 15,150 (multiple touchpoint level).
Here are three buy calls for the next 2-3 weeks:
Tata Consumer Products | LTP: Rs 744.15 | Target price: Rs 840 | Stop loss: Rs 680 | Upside: 13%
This stock, for the last couple of weeks, had been moving higher in a well-channelized manner.
The prices have been moving between the weekly upper Bollinger band and the 20-week SMA since May 2020.
The fact that the prices have managed to sustain above their 20-week SMA for so long points towards the presence of bullishness in the trend.
The RSI plotted on the weekly time seems to have witnessed a range shift as the indicator managed to breach above its 50-mark and has managed to hold the level since April 2020, indicating the presence of momentum in the bullish trend.
Going ahead, Rs 777 (127 percent extension level of the rise from Rs 458-634 projected from Rs 554) will act as a resistance level.
If prices manage to break above this level, we might see them move higher and test Rs 840 (161.8 percent extension level of the rise from Rs 458-634 projected from Rs 554).
The key level to watch out for on the downside is Rs 680 (multiple touchpoint level).
If prices breach below this level, we can assume them to move lower towards Rs 615 (previous swing low).
Minda Industries | LTP: Rs 644 | Target price: Rs 692 | Stop loss: Rs 625 | Upside: 7%
This stock has been in a strong uptrend since mid-March 2020. This up move took the prices from Rs 205 to Rs 612.
RSI plotted on the weekly timeframe has been placed above the 50 mark since August 2020.
Going ahead, Rs 692 (78.6 percent extension level of the rise from Rs 315-612 projected from Rs 459) will act as a resistance level.
If the prices manage to break above this level, we can expect them to move higher and test the Rs 756 mark (100 percent extension level of the rise from Rs 315-Rs 612 projected from Rs 459).
The key level to watch for on the downside is Rs 625-615 (support zone). If the prices breach below this level, they may move lower towards Rs 572 (multiple touchpoint level).
The technical points mentioned above point towards the possibility of prices moving higher towards the Rs 692 mark immediately. If this level is breached, we can expect the prices to move higher and test Rs 756.
Infosys | LTP: Rs 1,501.20 | Target price: Rs 1,572 | Stop loss: Rs 1,400 | Upside: 5%
Infosys has been forming a higher high higher low pattern for the past couple of weeks.
On June 17, the stock gained bullish momentum and tested a fresh 52-week high of 1,501.20. This up move was backed by above-average volume, indicating participation in the breakout.
RSI plotted on the weekly timeframe can be seen moving higher after finding support near the 50 mark, indicating the bulls are in control of the trend.
Going ahead, Rs 1,572 (100 percent extension level of the rise from Rs 1,051-1,392 projected from Rs 1,231) will act as a resistance level.
If the prices sustain above this level, we can see them move higher and test Rs 1,664 (127 percent extension level of the rise from Rs 1,051-1,392 projected from Rs 1,231).
The key levels to watch out for on the downside are Rs 1,400 (multiple touchpoint level), followed by Rs 1,300 (recent swing low).
(The author is a technical analyst at GEPL Capital)
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