By Nagaraj Shetti
The upmove with range bound action continued in the market on Wednesday and Nifty closed the day higher by 41 points. After opening on a weak note, the Nifty slipped into weakness in the early part of the session. A sustainable upside recovery has emerged from the day’s low of 15,764 in the early-mid part and the market showed intraday range movement in the afternoon to the later part of the session.
A reasonable long candle was formed on the daily chart with minor lower shadow. This action signal range bound action in the market with buy on dips opportunity. The Nifty is nearing a crucial overhead resistance of 15,900 levels and made a swing high of 15,877 on Wednesday. As happened in the previous few occasions, the lack of strength at the highs is emerging in the market near the crucial overhead resistance.
Hence, though market moves up in the next 1-2 sessions, the sharp upside breakout of 15,915 is not expected and there is a higher possibility of resumption of next round of downward correction from the higher levels. Though Nifty moved up on Wednesday, the overall market breadth was not impressive.
The short term trend of Nifty continues to be positive. But, the lack of strength in the upside momentum is ruling out any decisive upside breakout of 15,900 levels. There is a possibility of minor weakness emerging from the highs again in the next 1-2 sessions. Immediate support is placed at 15,750.
Buy Minda Corporation Ltd- (CMP Rs 135.90)
After showing larger consolidation movement in the last one month, the stock price has witnessed upside bounce so far this week. We observe upside breakout of the range movement at Rs 133 levels and the stock price now trading slightly lower on the daily chart. The larger degree positive sequence like higher tops and bottoms is intact and the stock price is now moving towards the new higher top. Weekly volume and RSI shows positive indication.
Buying can be initiated in MINDACORP at CMP (Rs 135.90), add more on dips down to Rs 131, wait for the upside target of Rs 152 in the next 3-4 weeks. Place a stoploss of Rs 127.
Buy Raymond Ltd- (CMP Rs 446.85)
After showing sideways range movement in the last one month, the stock price (Raymond) witnessed a sharp upside breakout of the upper range at Rs 435 in this week. Currently, it is trading slightly lower. The stock price has moved above the crucial overhead resistance of up sloping trend line at Rs 437 levels. The positive chart pattern like higher highs and higher lows was observed on the weekly chart over the last many months and the stock price is near the new higher high. Weekly RSI has turned up above 60 and volume has started to expand during upside breakout in the stock price. This is positive indication and signal more upside ahead.
One may look to buy RAYMOND at CMP (Rs 446.85), add more on dips down to Rs 430 and wait for the upside target of Rs 495 in the next 3-4 weeks. Place a stoploss of Rs 415.
(Nagaraj Shetti is a Technical Research Analyst at HDFC securities. The views expressed are the author’s own. Please consult your investment advisor before investing.)