By Nagaraj Shetti
After witnessing a massive sell-off during the later part of Tuesday’s trade, Nifty showed a sustainable upside bounce on Wednesday and closed the day higher by 177 points. After opening with an upside gap of 87 points (body gap, not a western gap), the market showed range movement with a positive bias that continued for the whole session. The opening upside gap remains unfilled and the Nifty closed at the day’s high. A reasonable positive candle was formed on the daily chart with minor upper and lower shadow.
A sustainable relief rally on Wednesday post sharp weakness of the previous session could be a cheering factor for the bulls to make a comeback. A decisive move above 17300 levels is likely to confirm a reversal pattern post higher bottom at 16825 levels and that could possibly pull Nifty towards further upside. Immediate support is placed at 17000 levels.
Buy Max Healthcare Institute LtdTarget: Rs 458 per share
After showing a gradual upmove in the last one month, the stock price has witnessed sharp upside breakout in this week and closed higher as per weekly timeframe chart. We observe a larger degree of higher tops and bottoms as per weekly timeframe chart and the recent swing low of Rs 326 of later March could be considered as a new higher bottom of the sequence. Volume has started to expand with rise in the stock price and weekly 14 period RSI moved above upper 60 levels.
Buying can be initiated in MAXHEALTH at CMP (416.30), add more on dips down to Rs 405, wait for the upside target of Rs 458 in the next 3-4 weeks. Place a stoploss of Rs 390.
Buy Godrej Consumer Products Ltd Target: Rs 885per share
After a sharp upmove in the early to mid-part of April, the stock price has shifted into a consolidation mode as per weekly timeframe chart. The present price action signal a formation of bullish flag on the weekly chart, which is an uptrend continuation pattern. A decisive move above Rs 807-808 levels could be considered as an upside breakout of the pattern and that could open a sharp upside for the near term. Weekly RSI has started to turn up from near 40 levels, which suggest strengthening of upside momentum for the stock price ahead.
Buying can be initiated in GODREJCP at CMP (800), add more on dips down to Rs 775, wait for the upside target of Rs 885 in the next 3-4 weeks. Place a stoploss of Rs 752.
(Nagaraj Shetti is a Technical Analyst at HDFC securities. Views expressed are the author’s own. Please consult your financial advisor before investing.)