On the weekly chart, the index has formed a Bearish candle which engulfed its previous week’s move, forming a “Bearish Engulfing” candlestick formation, indicating a bearish reversal.
For confirmation of this formation, a break and close below the previous week’s low are necessary, which could signal a change in the trend to the downside.
The chart pattern suggests that if Nifty crosses and sustains above the 21700 level, it could witness buying, leading the index towards 21800-22000 levels.
We have picked up 4 stocks for the next 3-4 weeks. Returns have been calculated based on LTP of 19 January 2024:
The New India Assurance Company: Buy| LTP Rs 242| Target Rs 278-287| Upside 18%| Holding Period 3-4 weeks
On the weekly chart, NIACL breached the ‘Falling Channel’ at 230 level with a strong bullish candle, signaling the continuation of a medium-term uptrend.
The stock is maintaining its position above the 38% Fibonacci Retracement level of the rally from 123 to 262, establishing a medium-term support base of around 208.
Volume activity diminished during the pattern formation, and its resurgence at the breakout suggests an influx of participation.
The weekly strength indicator RSI given a crossover above its reference line generated a buy signal. The above analysis indicates an upside of 278-287.
Oil India Ltd: Buy| LTP Rs 412| Target Rs 474-490| Upside 18%| Holding Period 3-4 weeks
On the weekly chart, OIL broke above the “Bullish Pennants” formation at 382, indicating a continuation of the medium-term uptrend.
The volume activity contracted during the pattern formation, and its resurgence at the breakout implies an influx of participation.
The stock is establishing higher highs and higher lows, while maintaining its position above the medium-term upward-sloping trendline, suggesting a continued uptrend.
The weekly strength indicator RSI is in a bullish mode and is holding above its reference line indicating a positive bias.
The above analysis indicates an upside of 474-490 levels.
PNB Housing Finance Ltd: Buy| LTP Rs 876| Target Rs 1015-1045| Upside 19%| Holding Period 3-4 weeks
On the weekly chart, PNB Housing broke above the nine weeks ‘Consolidation Zone’ between 827-760 with a strong bullish candle, signaling the continuation of an uptrend.
The breakout is accompanied by an increase in volume activity, suggesting a surge in market participation.
It has been adhering to a rising channel formation since the end of March 2023, indicating a medium-term uptrend.
The recent support at the lower band, accompanied by a sharp rebound, signifies its current advancement towards the upper band of the channel.
The weekly strength indicator RSI given a crossover above its reference line generated a buy signal.
The above analysis indicates an upside of 1015-1045 levels.
DCX Systems Ltd: Buy| LTP Rs 364| Target Rs 408-425| Upside 16%
On the daily chart, DCXINDIA has broken out above the ‘Falling Channel’ level at 365 with a bullish candle, signaling the continuation of a medium term uptrend.
It bounced to 393 and experienced a throwback to the breakout area, signifying a reconfirmation of the breakout.
The stock is holding above key averages of 20, 50, 100, and 200 days Simple Moving Average (SMA), signaling a strong uptrend.
The daily RSI is on the verge of a breakout indicating a positive trend.
The above analysis indicates an upside of 408-425 levels.
(The author is VP-Technical & Derivative Research, Axis Securities)
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)