Buy these two stocks for gains while Nifty forms bearish pattern on daily charts, support at 17500

Buy these two stocks for gains while Nifty forms bearish pattern on daily charts, support at 17500

By Rohan Patil

NSE Nifty 50 index on the daily chart is moving in a higher high higher bottom formation from the past two months and has given approximately 17 per cent returns in a very short span of time. The RSI reading above 80 levels on the daily chart is an alarm sign for bulls as we may see a dip or a correction in the prices soon. The MACD indicator has also reached above its previous high levels and the distance between its lines of polarity has increased significantly.

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The immediate support for the Nifty is placed at 17500 and below those 17300 levels. The upside resistance is capped near 17950 & 18100 levels.

BANK NIFTY

Bank Nifty on the daily chart is moving in a higher high higher bottom formation from past two months and has given an approximately 20 per cent in a very short span of time. On the daily chart, prices have formed a bearish engulfing candle stick pattern.

The RSI reading above 80 levels on the daily chart is an alarm sign for bulls as we may see a dip or a correction in the prices soon. The MACD indicator has also reached above its previous high levels and the distance between its lines of polarity has increased significantly.

The Bank Nifty on the daily chart has formed a bearish alternate shark harmonic pattern near 39500 levels and currently, prices are trading within its PRZ zone. The 21 – EMA is placed at 37900 levels and the trend of the average is still in the upward slope indicating an uptrend.

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The immediate support for the Bank Nifty is placed at 37900 and below those 37500 levels. The upside resistance is capped near 39700 & 40200 levels.

AMBUJA CEMENT: BUYTarget: Rs 450 | Stop Loss: Rs 399Return 07.20%

The prices consolidated in a very narrow range from 360 – 380 levels for more than three months and formed a consolidation band on the daily as well as weekly chart. The stock has given a range breakout with above-average volumes which indicates a change of a trend from sideways to bullish. The prices are also sustained above its 21-day exponential moving average which is placed at 380 levels.

Momentum oscillator RSI (14) is reading in a higher high higher bottom formation on the daily time frame. The MACD indicator has crossed above its line of polarity.

NTPC: BUYTarget: Rs 168 | Stop Loss: Rs 151.50Return 06.50%

The prices witnessed an inverted head & shoulder pattern breakout on 17th Aug which was placed above 159 levels the daily time frame. The stock has closed above its neck line support which is an additional confirmation for the pattern. The prices are also sustained above its 21-day exponential moving average which is placed at 155 levels. The counter is also trading near the upper band of the Bollinger band indicates a possible continuation of the uptrend after the recent consolidation.

Momentum oscillator RSI (14) is reading in a higher high higher bottom formation on the daily time frame. MACD indicator has crossed above its line of polarity.

(Rohan Patil is a Technical Analyst at Bonanza Portfolio, Views expressed are the author’s own. Please consult your financial advisor before investing)