The current stock scene unveils notable developments, as Nifty displays a lower top pattern subsequent to reaching an all-time high of 19,992. This pattern signifies a phase of profit-booking at elevated levels, accompanied by a sense of market consolidation. The appearance of a Doji candle pattern this week further adds an element of uncertainty in the short term.
Nifty’s Corrective Trend and Market Guidance
Nifty currently oscillates within the range of its 20-day SMA (19,645) and 50-day SMA (19,250), affirming a consolidation period. The momentum indicator RSI reflects a declining trend, persistently residing below the 50-level mark on daily charts. This decline in positive momentum hints at a potential decrease in Nifty’s upward trajectory in the short term.
Decoding Nifty’s Notable Developments
In terms of support and resistance, Nifty finds a support base at 19,234. A breach below this level could lead to further support at 18,887. On the other hand, an uptrend could face resistance at 19,645, followed by the all-time high of 19,992.
Vidayan Sawant, AVP (Technical Research) at GEPL Capital, presents enticing opportunities within the present market environment. Notable stocks are recommended for potential gains:
A buy recommendation with a last trading price of Rs 70.60. The target price is Rs 90, offering a potential 27% gain. The stock displays a breakout pattern, indicating a positive sentiment. The recent higher top and higher bottom formation strengthens this outlook. Weekly charts reveal a cup and handle pattern breakout, supported by notable trading volume. The stock sustains above its 20-day SMA, a reliable support level. RSI maintains levels above 60, reflecting positive momentum.
A buy recommendation with a last trading price of Rs 484. The target price is Rs 560, suggesting up to 16% profit in 2-3 weeks. Praj Industries recently broke out of a consolidation pattern, reaching an all-time high with high trading volume. A saucer pattern breakout on the daily chart further validates the upward trend. Change in Polarity (CIP) near 460 reaffirms the bullish momentum. RSI levels consistently remain above 60 on multiple timeframes.
An investment recommendation with a last trading price of Rs 154. The target price is Rs 185, offering a potential 20% profit. A breakout from the ascending channel pattern, coupled with a 52-week high, signifies robust positive momentum. Change in Polarity (CIP) near 131 reinforces the upward trajectory. The stock maintains positions above essential moving averages. RSI remains consistently above 60, indicating strong positive momentum.
As Nifty’s trend in the short and medium term appears corrective, continued observation is recommended, especially while the index remains below 19,645. Market participants should stay attuned to these trends and insights for informed decision-making in the evolving market environment.