The Nifty has been consolidating in the range of 17,400-17,600 for the last few sessions. It made a short-term top at 17,778 on August 30 and that has become the near-term resistance for the index now. For the confirmation of medium-term uptrend resuming, it has to surpass the 17,800-point resistance.
On the downside, 17,400 and 17,150 are crucial supports to watch out for. Historically, September has been muted for the index and the same is expected in the current year as well.
However, on the positive side, the Indian markets have been resilient so far against the global market uncertainty. The Nifty has outperformed in most of the developed and emerging markets in the last one month. The icing on the cake is that the Smallcap Index has started participating after a nice run-up of large-caps from the June 2022 bottoms.
Breadth of the market has been improving day by day. The number of stocks, their 200-DMA and the number of stocks making new 52-week highs for the NSE500 index have been improving on a consistent basis. The advance decline ratio has also been great through the last few trading sessions. Strong breadth indicates a healthy bull market.
We believe that the benchmark indices like the Nifty and the Sensex could consolidate or may witness minor corrections in the near term, as there is no support coming in from global equity markets. However, we cannot rule out the possibility of mid-cap and small-cap segment to perform well in the coming days.
Here are three buy calls for next 2-3 weeks:
HG Infra Engineering: Buy | LTP: Rs 624 | Stop-Loss: Rs 590 | Targets: Rs 670-730 | Return: 7-17 percent
The stock has broken out from the downward sloping trend line on the weekly charts. Price breakout is accompanied with jump in volumes. It has also broken out from the consolidation, which held for previous 7 weeks.
The stock is placed above its 20, 50, 100 and 200 days moving average (DMA), which indicates bullish trend on all time frames. Indicators and oscillators like RSI (relative strength index) and MACD (moving average convergence and divergence) have been showing strength in the current uptrend.
Infrastructure sector has been outperforming and same is expected to continue.
Welspun Corp: Buy | LTP: Rs 254 | Stop-Loss: Rs 228 | Targets: Rs 285-305 | Return: 12-20 percent
The stock has broken out from the consolidation pattern which held for previous three months. It has reached 14-year high with rising volumes.
The stock been forming higher tops and higher bottoms on the daily and weekly chart. The stock is placed above all important moving averages.
Karnataka Bank: Buy | LTP: Rs 75.3 | Stop-Loss: Rs 71 | Targets: Rs 83-88 | Return: 10-17 percent
The stock has broken out from the downward sloping trend line, which adjoins the recent swing highs on the daily chart. Breakout is accompanied with rising volumes.
Midcap private sector banks have been outperforming for last couple of weeks and same is expected to continue. Indicators and oscillators setup is bullish on daily and weekly charts.
