By Nagaraj Shetti
After showing a sustainable upside bounce from the intraday lows on Tuesday, Nifty shifted into a consolidation movement at the hurdle of 22000 levels on Wednesday and closed the day on a flat note. Nifty opened today with an upside gap of 116 points and slipped into weakness from the highs soon after the opening.
Minor recovery was seen amidst a range movement in the mid part, but upside recovery picked up towards the end. The opening upside gap has been filled completely.
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A small negative candle was formed on the daily chart with lower shadow. Technically, this action indicates choppy movement and the market is expecting RBI’s mid quarter policy outcome to show directional move.
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Nifty has been hitting the hurdle of previous crucial opening downside gap at 21970 levels in the last few sessions, but a decisive upside breakout above this gap resistance is missing so far.
The short-term trend of Nifty continues to be positive. All eyes on the outcome of RBI policy, which is expected to be out tomorrow by around 10 am. There is a higher possibility of an upside breakout of 21950-22000 mark in the short term. Immediate support is at 21750.
Top Stock Picks:
Buy State Bank of India – (CMP Rs 677.50)
After showing downward correction in the month of January-24, the PSU banking major-SBIN has witnessed sharp upside breakout in the last couple of weeks and is currently trading higher. The stock price has moved above the crucial hurdle at Rs 655 and is trading higher. The long-term chart remains positive with higher tops and bottoms was observed on the weekly timeframe chart. The volume has started to rise during upside breakout in the stock price and weekly 14 period RSI shows positive indication.
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Buying can be initiated in SBIN at CMP (Rs 677.50), add more on dips down to Rs 655, wait for the upside target of Rs 730 in the next 3-5 weeks. Place a stoploss of Rs 635.
Buy Samvardhana Motherson International Ltd- (CMP Rs 122.25)
The stock price has been on the way up over the last few months, as we observe higher highs and higher lows formation over the last few weeks. Recently, the stock price has witnessed upside breakout of down sloping intermediate trend line at Rs 110 levels and closed higher. Though, the stock price placed at the highs, still there is no indication of any reversal pattern building at the higher level. Weekly 14 period RSI is around 70 and this indicates strong upside momentum for the stock price.
One may look to buy MOTHERSON at CMP (Rs 122.25), add more on dips down to Rs 118 and wait for the upside target of Rs 134 in the next 3-5 weeks. Place a stoploss of Rs 114.
(Nagaraj Shetti, Technical Research Analyst, HDFC securities. Views expressed are the author’s own. Please consult your financial advisor before investing.)
