Nifty opened gap-down and closed in the red amid volatility and sideways momentum in global markets on September 21. On the daily chart, the Nifty has formed a Doji after taking resistance from the 17,800 levels. On the hourly timeframe, the Nifty was seen to be trading in a range of 17,500 and 17,800 and till it breaks the range on either side with confirmation, it is expected to remain sideways and it would be interesting to see how it performs.
The momentum oscillator RSI (relative strength index - 14) on the daily chart is at around 53; whereas the MACD (moving average convergence and divergence) is moving towards the centre point from higher levels.
India VIX has increased from 18.79 to 19.32 levels above its 200 EMA (exponential moving average). Maximum pain of Nifty is at 17,750. Nifty Put-Call ratio (PCR) is at 0.75 whereas Bank Nifty PCR is at 0.84.
Important support levels for the Nifty are at 17,500, 17,400 and 17,350 whereas resistance levels are at 17,650, 17,750 and 18,000. As per the F&O data, the short build-up has substantially increased in ITM (in-the-money) calls, whereas long unwinding is seen in OTM (out-of-the-money) puts which indicates a negative market. 18,100 and 18,000 have high short built-up whereas 17,700 and 17,500 have high long built-up.
Here is one sell call and one buy call for next 2-3 weeks:
Amara Raja Batteries: Sell October Future | LTP: Rs 512.45 | Stop-Loss: Rs 527 | Target: Rs 494 | Return: 3.6 percent
On a weekly chart, the stock has witnessed sharp up move and price has made a high of Rs 1,025.50 in mid of January 2021 and then stock traded in a lower highs and lower lows formation till date.
The price of Amara Raja Batteries has been falling continuously in a well channelized manner from last couple of week. Every time it has touched, the prices have respected the bearish channel's upper and lower band. In addition, the price has also reversed from upper Bollinger Band with Bearish Engulfing candlesticks, which indicates a bearish set-up in the counter.
Moreover, a momentum indicator RSI (14) reading is below 50 levels &, which suggest bearish move for the midterm.
Hence, based on above technical structure one can initiate a short position in Amara Raja October futures at Rs 512.45 or a rise in the price till Rs 519.50 levels can be used as selling opportunity for the downside target of Rs 494. However, the bearish view will be negated if the price closes above the resistance level of Rs 527.
Apollo Hospitals Enterprises: Buy | LTP: Rs 4,604.8 | Stop-Loss: Rs 4,488 | Target: Rs 4,850 | Return: 5.3 percent
On a daily chart, the stock is trading in bullish territory after the breakout of the Falling channel and again reclaim the upper band of the pattern, which indicates upward direction in the stock for the short to medium term.
On the weekly scale, it has formed Bullish Engulfing candlestick, which point out positive trend in midterm. In addition, the price is trading above 100 days exponential moving average, which indicates positive trend.
Moreover, the technical indicator Ichimoku Cloud suggests that the price is trading above the cloud which shows positive trend in the counter. A momentum indicator RSI (14) reading is above 60 levels, which add more strength on the upside.
Hence, based on above technical structure one can initiate a long position in stock at Rs 4,604.80 or a fall in the price till Rs 4,590 levels can be used as buying opportunity for the upside target of Rs 4,850.
However, the bullish view will be negated if the price closes below the support level of 4,488.
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