By Nagaraj Shetti
Consolidation movement with weak bias continued in the market for the second consecutive session on Wednesday and the Nifty closed the day lower by 61 points. A small negative candle was formed on the daily chart with upper and lower shadow. Technically, this pattern indicates the formation of a high wave-type candle pattern, which displays high volatility in the market. Normally, such high wave formations after a reasonable up-move or down moves act as an impending trend reversal. But, having formed this pattern within a range movement, the predictive value of this pattern could be less. The near term uptrend status remains intact for Nifty on the daily chart and the smaller degree of higher tops and bottoms is also active. After the upside breakout of a hurdle at 16400 levels on Monday, the Nifty showing minor weakness down to the previous upside breakout area (16400 levels) could be considered as an important support for the market. Other supports like daily 10 and 20 period EMA are also placed around 16400 levels.
Stock Picks:
Buy ELGI EquipmentTarget: Rs 418
After shifting into a narrow range movement in the last couple of weeks, the stock price has witnessed a sharp upside breakout on Wednesday and closed higher. The stock price has moved above another hurdle of Rs 365 levels and closed higher. This is a positive indication. The larger degree of higher tops and bottoms is intact and the present up-move could be in line with the formation of new higher tops. The pattern of daily RSI and volume indicate more upside for the stock price ahead.
Buying can be initiated in ELGIEQUIP at CMP (377.90), add more on dips down to Rs 366, and wait for the upside target of Rs 418 in the next 3-4 weeks. Place a stoploss of Rs 353.
Buy TTK Prestige Ltd Target: Rs 970
The stock price has moved up decently this week and is currently placed at the edge of a decisive upside breakout of the crucial overhead resistance around Rs 870-880 levels. Further upside from here could open a sharp upmove ahead. The stock price surpassing weekly 10 and 20 period EMA around Rs 845 and 855 levels signal more upside in the near term. Volume has started to expand with upmove in the stock price and weekly 14 period RSI shows positive indication.
Buying can be initiated in TTK Prestige at CMP (880), add more on dips down to Rs 855, wait for the upside target of Rs 970 in the next 3-4 weeks. Place a stoploss of Rs 830.
(Nagaraj Shetti is a Technical Research Analyst at HDFC securities, Views expressed are the author’s own. Please consult your financial advisor before investing.)