Indian stock market: The Nifty index is showing signs of near-term bearishness as it forms a double top pattern on the daily chart, coupled with a bearish engulfing candle. This suggests a sell-on-rise approach in the market. Confirmation of the double top pattern would require follow-up selling in the upcoming week. Immediate resistance is noted at the 22,600-22,700 zone, where aggressive call writing has been observed in the options market. On the downside, the index has immediate support at 22,300, and a breach below this level could accelerate the downside momentum.
Bank Nifty
The BankNifty index faced selling pressure from higher levels but maintained its uptrend, closing near the immediate support of 49,000. Immediate resistance is at 49,200, and a break above could trigger short-covering moves towards 49,500 levels. Conversely, immediate support lies at 48,800-48,700, and a breach might lead to further downside towards the 48,400 mark, where the 20DMA is situated.
Stocks to buy
Dr. Reddy: Buy at ₹6330 | Target Price: ₹6600/6900 | Stop Loss: ₹6100
The stock exhibits a promising setup: a breakout from a descending trendline on the daily chart, accompanied by a bullish candlestick. It maintains a position above its 21-day moving average, indicating short-term strength. The Relative Strength Index (RSI) has also shown a bullish crossover, residing at 60.
Fortis: Buy at ₹450 | Target Price: ₹480/500 | Stop Loss: ₹430
The stock continues to exhibit a robust uptrend, maintaining higher highs and higher lows on the daily chart. Trading above its short-term moving average of 20DMA at 438, it acts as a cushion against declines. In the previous trading session, volume-based buying was observed, supported by a positive crossover in the momentum indicator RSI, confirming a buy signal.
TAJ GVK Hotels and Resorts: Buy at ₹400 | Target Price: ₹435/450 | Stop Loss: ₹385
The stock has recently experienced a significant breakout on the daily chart, breaking free from an ascending triangle pattern with a notable surge in trading volumes. This breakout is complemented by a positive crossover in the momentum indicator RSI, indicating a strong buy signal. With lower-end support situated at 387, providing a cushion for bullish movements, the potential upside targets are set at 435 and 450.
The author Kunal Shah is the Senior Technical & Derivative Analyst at LKP Securities.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.
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Published: 05 May 2024, 03:17 PM IST
