By Nagaraj Shetti
After showing consolidation type movement in the last four sessions, Nifty shifted into an upside breakout of 13600 levels on Wednesday and closed the day higher by 114 points. After opening on a positive note, the market moved into a narrow high low intraday range till the mid part of the session. Further upside has occurred in the mid to later part and Nifty closed near the highs. The opening upside gap remains unfilled.
A small positive candle was formed with long lower shadow. Nifty closed above the last four session’s upper range of 11590 levels. Technically, this pattern indicate an upside breakout of the small range at 13600. The overall market breadth was positive and broad market indices like midcap 100 and small cap 100 of NSE exchange have closed higher by 1.15% and 1.05% respectively. This is positive indication.
After the upside breakout of the resistance of top to top trend line at 12900 levels in the later part of Nov 20, Nifty displayed strength at the new highs and sustained the higher levels. Hence, the trend line upside breakout could be considered as a valid upside breakout and the positive implication is underway since then.
The short term trend of Nifty is positive and one may expect further upmoves in the coming sessions. The next upside levels to be watched around 13900-14000 in the next 1-2 weeks. Immediate support is now placed at 13580.
Buy Torrent Pharmaceuticals Ltd- (CMP Rs 2788)
The weekly timeframe chart of Torrent Pharma Ltd indicate an attempt of upside breakout, after moving into a sideways range movement over the last one month. The stock price is making an attempt of moving above crucial overhead resistance of intermediate down trend line at Rs 2770 levels.
Hence, a sustainable move above this area could have a sharp positive impact on the stock price ahead. Weekly 14 period RSI is placed below 60 levels and volume has started to expand along with the upmove in the stock price.
Buying can be initiated in Torrent Pharma Ltd at CMP (2788), add more on dips down to Rs 2680, wait for the upside target of Rs 3065 in the next 3-4 weeks. Place a stoploss of Rs 2590.
Buy HEG Ltd – (CMP Rs 868.40)
The weekly timeframe chart of HEG Ltd signal a range bound movement with positive bias. The stock price is moving in a narrow band with a formation of consistent higher lows. Now making an attempt of upside breakout of down sloping trend line at Rs 875-880 levels.
A decisive/sustainable move above this trend line resistance could open a sharp up trended move in the stock price. Weekly 14 period RSI is turning up from near 57-58 levels and its move above the upper 60 could signal a strengthening of upside momentum in the near term.
Buying can be initiated in HEG Ltd at CMP (868.40), add more on dips down to Rs 830, wait for the upside target of Rs 960 in the next 3-4 weeks. Place a stoploss of Rs 800.
(Nagaraj Shetti is a Technical Research Analyst at HDFC Securities. Views expressed are the author’s own. Please consult your financial advisor before investing.)