By Nagaraj Shetti
After showing weakness with range bound action in the last few sessions, Nifty witnessed a decisive upside bounce from the lows on Wednesday and closed the day higher by 117 points.
Nifty opened with a negative note and slipped into weakness amidst choppy movement in the early part of the session. Sharp intraday buying has emerged from the day’s low of 22224 levels and the market has witnessed a decisive intraday upmove in the mid to later part of the session and closed at the highs. New all-time high was registered at 22497 levels.
A long bull candle was formed on the daily chart with long lower shadow. Technically, this pattern indicates bullish rising three method pattern and this is an uptrend continuation pattern.
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The near-term trend of Nifty remains positive. One may expect further upside in the short term and the next upside levels to be watched around 22800. Immediate support is at 22300-22250 levels.
Top Stock Picks
Buy Bank of Maharashtra – (CMP Rs 62.20)
After showing minor downward correction in the last few weeks, the PSU banking stock MAHABANK has shifted into a sustainable upside bounce and minor selling pressure at the highs so far this week. The larger degree positive pattern like higher tops and bottoms is intact and the stock price has bounced back after the formation of new higher bottom at Rs 54 in mid of February. Immediate support of 10-week EMA is offering base for the stock price and resulting in a sustainable upside bounce.
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Buying can be initiated in MAHABANK at CMP (Rs 62.20), add more on dips down to Rs 59.50, wait for the upside targets of Rs 70 and Rs 77 in the next 3-5 weeks. Place a stoploss of Rs 56.
Buy EIHOTEL – (CMP Rs 424.60)
The sideways range movement of the last few weeks is on the verge of decisive upside breakout around Rs 430-435 levels in this hotel stock. The stock price continues to sustain on the immediate support of 10-day EMA in the last few weeks. The larger degree positive pattern like higher tops and bottoms is intact. Volume and daily RSI shows positive indication.
One may look to buy EIHOTEL at CMP (Rs 424.60), add more on dips down to Rs 410 and wait for the upside targets of Rs 460 and Rs 500 in the next 3-5 weeks. Place a stoploss of Rs 395.
(Nagaraj Shetti, Technical Research Analyst, HDFC securities. Views expressed are the author’s own. Please consult your financial advisor before investing.)
