By Nagaraj Shetti
After showing an excellent upmove in the last couple of sessions, Nifty slipped into profit booking from the new highs on Wednesday and closed the day lower by 55 points. After opening on a positive note, the market has shifted into further upside in the early-mid part of the session.
A new all-time high was formed at 17225 levels and the profit booking has emerged from the day’s highs. It later made an attempt to show upside recovery from the lows in the mid part, but was able to sustain the recovery and closed near the lows.
A reasonable negative candle was formed at the new highs, which indicate consolidation/minor weakness in the market. Having moved up sharply recently, the present consolidation/weakness could be considered as a buying opportunity in the market.
There is a higher possibility of upside recovery attempt from the lows in the short term. Nifty on the intraday timeframe like 60 min is showing a range bound action with weak bias. There is an absence of any sharp selling from near the highs. The intraday support of 10 period EMA and 20 period EMA are intact.
Though Nifty declined on Wednesday, the overall market breadth was on the positive side and broad market indices like mid cap and small cap of NSE exchange have closed higher by 0.75% and 0.34% respectively. This is positive indication.
The short term uptrend in the market remains intact. although Nifty declined from the highs, still there is no formation of any significant reversal of present uptrend in the market. The consolidation/minor weakness could continue in the next 1-2 sessions, before showing upmove from the lows. Immediate support is placed at 16950 levels.
Buy PNC Infratech Ltd (CMP Rs 340.50)
After showing range bound action in the last couple of weeks, the stock price (PNC Infra) has witnessed a sharp upside breakout of Rs 330 in this week and closed higher on Wednesday. We observe a formation of consistent higher high formation on the weekly chart and the recent swing low of Rs 275 of mid part of Aug-21 could be considered as a new higher bottom of the sequence. The volume and weekly 14 period RSI indicate positive outlook ahead.
Buying can be initiated in PNC Infratech Ltd at CMP (340.50), add more on dips down to Rs 325, wait for the upside target of Rs 375 in the next 3-4 weeks. Place a stoploss of Rs 315.
Buy SOBHA Ltd – (CMP Rs 679.70)
The realty stock (Sobha Ltd) has been in a gradual downward correction amidst a range movement over the last 5-6 weeks, as per weekly chart. This week saw an excellent upside breakout of the range and the stock price is now placed to move above the hurdle of Rs 680 levels. Volume has expanded during upside breakout in the stock price and weekly DMI/ADX signal further strengthening of upside momentum ahead.
Buying can be initiated in SOBHA Ltd at CMP (679.70), add more on dips down to Rs 652, wait for the upside target of Rs 750 in the next 3-4 weeks. Place a stoploss of Rs 630.
(Nagaraj Shetti is a Technical Research Analyst, HDFC securities. Views expressed are the author’s won. Please consult your financial advisor before investing.)
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