The Indian equity markets are continuing their bullish momentum as the Nifty reclaimed the 18,000 mark and is ready for a move towards an all-time high. We are outperforming the global markets, and now global cues also look supportive, so we see strong bullish momentum in the market.
FIIs have been buying continuously for the last several days, and they may continue to put money in Indian equity markets unless there is any negative surprise. The market will react to US inflation numbers on Wednesday. However, most of the negativity in terms of the rate hike has already been discounted. Therefore, any positive news on the inflation front may lead to a further rally in the market.
Technically, the Nifty managed to close above the 18,000 mark and there is a breakout of a Bullish Flag formation that may lead to fresh bullish momentum in the market where 18,350-18,600 are the next resistance levels.
On the downside, 18,000-17,940 is an immediate support area, while 17,777-17,700 is a sacrosanct support zone.
Bank Nifty is also trading above 40,500 level. However, 40,750–41,000 is an immediate resistance area; above this, we can expect a rally towards 42,000 level. On the downside, 40,500–40,250 is an immediate support zone, while 39,700 is the next support level.
If we look at the derivative data, then the Nifty Put-Call ratio has improved to 1.39, while the short exposure of FIIs in the index future stands at 75 percent, which means there is still scope for a short-covering rally.
Here are three buy calls for next 2-3 weeks:
Sree Rayalaseema Hi-Strength Hypo: Buy | LTP: Rs 836 | Stop-Loss: Rs 760 | Target: Rs 994 | Return: 19 percent
The counter is in a classical uptrend; it has witnessed a breakout of an ascending triangle formation to resume its uptrend. The breakout coincides with rising volume and it managed to sustain above the breakout level where we can expect the level of Rs 1,000 in the near term.
It is trading above its all-important moving averages with a positive bias in momentum indicators. On the downside, Rs 800 will act as a strong support level, with Rs 760 as the next support level. It is beautifully respecting its 20-DMA (daily moving average), which is a classic sign of trend strength.
AMI Organics: Buy | LTP: Rs 1,110 | Stop-Loss: Rs 1,000 | Target: Rs 1,334 | Return: 20 percent
The counter is coming out of a long consolidation with strong volume. It is trading above its all-important moving averages and is ready to give a breakout of a Bullish Inverse Head and Shoulder formation that may lead to a rally towards the previous swing high of Rs 1,350.
On the downside, a 20-DMA of Rs 1,000 will act as an immediate and strong support level. On the downside, the cluster of 50 and 20-DMA around Rs 1,000 will act as a strong support level.
PSP Projects: Buy | LTP: Rs 622 | Stop-Loss: Rs 580 | Target: Rs 714 | Return: 15 percent
The counter is coming out of 22-day of consolidation with heavy volume followed by a breakout of the Bullish Inverse Head and Shoulder formation. The overall structure of the counter is showing a classical uptrend.
The pattern suggests an immediate target of Rs 660, while it has the potential to move further upside till the Rs 714 level. On the downside, a breakout level of Rs 580 will act as a strong base, whereas the 20-DMA will act as a strong support level. Most of the momentum indicators are positively poised.
