Weekly Technical Picks: 4 Trade Calls For The Week By Rajesh Palviya of Axis Securities

Nifty had a strong start to the week, but higher levels of selling resulted in a disappointing week's finale. On January 20, Nifty ended the week at 21,571.80, down 489.45 points on a weekly basis. In contrast, Bank Nifty had a strong start to the week but saw strong selling as the week came to a wrap-up. On January 20, the Bank Nifty closed at 46,058.20, down 2,074.85 points on a weekly basis. For the upcoming sessions of the week, Rajesh Palviya Head- Technical Research at Axis Securities has recommended 4 technical stocks to buy.

Weekly Nifty Outlook

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, said the analyst.

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. The important support for the week is around 21400-21200. For the week, we expect Nifty to trade in the range of 22000-21200 with a mixed bias. The weekly strength indicator RSI and momentum oscillator Stochastic have both turned negative from the overbought zone and are below their respective reference lines, indicating a profit booking, said Rajesh Palviya.

Weekly Bank Nifty Outlook

On the weekly chart, the index has formed a long Bearish candle, indicating a lower High-Low compared to the previous week and closing below its low, signaling weakness at current levels. The chart pattern suggests that if Bank Nifty crosses and sustains above the 46850 level, it could witness buying, leading the index towards 46000-46200 levels, stated the analyst.

However, if the index breaks below the 45500 level, it may witness selling, taking it towards 45300-45200. For the week, we expect Bank Nifty to trade in the range of 46200-45200 with a negative bias. The weekly strength indicator RSI and momentum oscillator Stochastic have both turned negative from the overbought zone and are below their respective reference lines, indicating a profit booking, added Rajesh Palviya.

Stocks To Buy This Week

Rajesh Palviya, SVP Research (Head Technical & Derivatives) at Axis Securities has recommended the below stocks to buy this week based on technical analysis.

The New India Assurance Company

Buy Range: 242-237, Stop loss: 220, Upside: 16% - 20%, target: 278-287 levels, duration: holding period is 3 to 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 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 levels.

Oil India

Buy Range: 412-404, Stop loss:375, Upside: 16% -20%, target: 474-490 levels, duration: holding period is 3 to 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

Buy Range: 870-854, Stop loss:785, Upside: 18% -21%, target: 1015-1045 levels, duration: holding period is 3 to 4 weeks

On the weekly chart, PNBHOUSING broke above the nine weeks 'Consolidation Zone' between 827-760 with a strong bullish candle, signaling the continuation of a 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

Buy Range:364-357, Stop loss:337, Upside:13%-18%, target: 408-425 levels, duration: holding period is 3 to 4 weeks.

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 in the stock. The daily RSI is at the verge of breakout indicating a positive trend. The above analysis indicates an upside of 408-425levels.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.