By Nagaraj Shetti
The choppy movement continued in the market on Wednesday and Nifty closed the day lower 41 points amidst a range movement. A small negative candle was formed on the daily chart with minor upper and lower shadow. Technically, this action reflects a small range of movement in the market. The high-low range of the market is getting narrower in the last three sessions and the Nifty placed firmly at the crucial support of the previous upside broken trend line resistance at 17600 levels. The sharp selling participation is missing this time after the formation of a new higher top at 18863 levels on 17th March. This is compared to previous formations of lower tops and subsequent sharp declines of the last few months. This is a positive indication. Bank Nifty continues to show consolidation movement for the third consecutive session on Wednesday. Immediate support is at 41800 levels.
Stock Picks
Rallis India Ltd: Buy – CMP: Rs 205 – TP: Rs 223-235 – SL: Rs 193
The weekly timeframe chart of Rallis India Ltd indicates a sustainable upside bounce in this week after the upside recovery of last 2 weeks. The downward correction of the last few months seems to have completed. The stock price has made an important bottom reversal pattern at Rs 187-swing low of last week. The upside bounce of this week was associated with bullish candlestick pattern formation of the last months. Weekly 14 period RSI has started to turn up from near the lower 40-45 levels. Hence, one may expect upside momentum in the stock price to strengthen ahead. Buying can be initiated in RALLIS at CMP (Rs 205), add more on dips down to Rs 199 wait for the upside targets of Rs 223 and Rs 235 in the next 3-5 weeks. Place a stoploss of Rs 193.
Laurus Labs Ltd: Buy – CMP: Rs 311.50 – TP: Rs 337-360 – SL: Rs 290
The weekly chart of this Pharma stock-Laurus Labs Ltd indicates an intermediate down trend over the last many months. The stock price has showed signs of important bottom formation at the swing low of Rs 286 levels in the last month and has witnessed sustainable upside bounce in last few weeks. The Intra-week decline of this week seems to have reversed on the upside as per smaller timeframe charts. The stock price is currently in an attempt of witnessing upside breakout of weekly 10 period EMA at Rs 316 levels. The volume has expanded during sharp upmove in the stock price of previous week. Buying can be initiated in LAURUSLABS at CMP (311.50), add more on dips down to Rs 300, wait for the upside targets of Rs 337 and Rs 360 in the next 3-5 weeks. Place a stoploss of Rs 290.
(Nagaraj Shetti is Technical Research Analyst at HDFC securities. Views expressed are author’s own.)