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.
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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
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