NIFTY Index Chart Analysis

L ast week, the domestic benchmark indices closed flat on a week-on-week basis but formed a bearish pattern (shooting star) that warrants attention. The Nifty closed at a week’s low to create a shooting star candle, indicating a potential reversal in the market’s upward trend. It opened much below the shooting star low on fresh week’s opening. Unless it closes above the 22,500-22,580, we can assume that the index has formed an intermediate top. Previously, all the swing highs formed a long upper shadow candle (shooting star), followed by a significant decline.[EasyDNNnews:PaidContentStart]

In the last two days of fall, over 1 per cent of the decline was with high volume, and hope is the 50 DMA, which is at 22,153. The indications clearly show that we are almost at the doorstep of correction. Since October 2023, the index has not closed below the prior week’s low and below the 10-week average. Currently, it is 0.07 per cent below the 10-week average and 0.54 per cent above the 50 DMA.

Before this, the 20 DMA (22,283) that connecting the prior highs of January 16 and March 7. It tested the resistance line twice last week and formed all-time highs for two consecutive days at the resistance line. Finally, it closed below the March 7 high, which can be considered a failed breakout of the 18-day cup pattern. Since January 16, the index has lost its rhythm in price action. The zigzag moves resulted in several pattern failures.

Global equities tumbled as war looms in West Asia. Soaring gold prices indicate a probable war. The global benchmark indices closed below the 23.6 per cent retracement levels of the prior uptrend. The Dow and S & P closed below the 10-week average and 50 DMAs. Most importantly, the CBOE VIX rose by 16.10 per cent on Friday, indicating an unknown storm is coming for the equity markets. For now, the strategy must be of protecting the capital. A close below the 22,280-22,153 zone of support on a weekly basis will provide the bearish confirmations.

The 50 DMA and 61.8 per cent retracement level of the prior swing are also in this area. In any case, if the Nifty closes below 22,100, expect a correction towards the recent low of 21,710. On the upside, the index must close above 22,580 to resume the uptrend. As the earnings season begins, stock-specific activity will increase. The volatility level will also spurt. It is not the time to be complacent. Caution is advised in these uncertain times. In a nutshell, the downside risk is greater. Any bounce may attract selling pressure. The general election pre-poll trends will also impact the market sentiments. Keep leveraged exposures at modest levels. A cautious outlook is advised for the coming weeks.

STOCK RECOMMENDATIONS

ASHIANA HOUSING LTD. ....................... BUY .................... CMP ₹366.05
BSE Code : 523716
Target 1 .... ₹435
Target 2 ..... ₹475
Stoploss....₹300 (CLS)

Ashiana Housing, a prominent player in the real estate sector, has been a leader in the senior living homes’ segment for the past six years. Its thematic residential apartments, including kids-centric homes, active senior living, living homes and premium homes, have garnered significant attention. The company’s footprint extends across Rajasthan, Haryana, Jharkhand, Tamil Nadu, Maharastra and Gujarat, with five greenfield projects recently launched in Jamshedpur, Jaipur, Pune, Gurugram, and Bhiwandi.

In the current year, the company has unveiled six senior living projects, two premium housing projects and six extension projects, with a total of 94 lakh sq. feet projects in the pipeline. Technically, the stock has broken out of an eight-week base and is trading at a new lifetime high. Its Relative Strength line is at a new high, showing an outperformance compared to the broader market. It is well-placed above all the key moving averages. Currently, it is 19.65 per cent above the 50 DMA and 44.70 per cent above the 200 DMA. The weekly MACD has given a fresh buy signal. The RSI is in the strong bullish zone. The Elder’s impulse system has formed a strong bullish bar. As the stock is trading in uncharted territory, it has cleared all the resistance. The Stochastic RSI has given strong bullish signals. The stock has not formed a lower low since December 2022 and continues the uptrend. After meeting the prior 106-week cup pattern’s target, it consolidated and formed a flat base. In short, the stock has registered a strong bullish breakout with above average volume. Buy this stock in the ₹350-365 zone. Maintain a stop loss at ₹300. The medium-term target is at ₹435.

PICCADILY AGRO IND. LTD. .................... BUY .................... CMP ₹430.25
BSE Code : 530305
Target 1 ..... ₹500 
Target 2 .... ₹540 
Stoploss....₹335 (CLS)

Piccadily Agro Industries, the largest independent manufacturer and seller of malt spirits in India, has established a strong foothold in the industry. Its distillery division contributes a significant 57 per cent of the revenue. The company’s ‘Indri’ brand single malt whiskey has emerged as the fastest-growing single malt whiskey in the world, selling 1,00,000 cases and achieving a milestone within two years of the launch. With a staggering 599 per cent growth over 2023, Indri now claims to dominate more than 30 per cent market share in India.

This is a testament to its market leadership and potential for further growth. Technically, the stock has broken out of a seven-week base. Before the base formation, the stock had rallied by 85 per cent. Currently, it closed at an all-time high. The 10-week average has acted as support in the recent base formation. It is well-placed above all the key moving averages. It is 20.69 per cent above the 50 DMA and 87.30 per cent above the 200 DMA. The weekly MACD has given a fresh bullish signal. The RSI is in a strong bullish zone. The Elder’s impulse system has formed strong bullish bars. The Stochastic RSI is in a bullish set-up. The ADX (52.54) shows strong trend strength. As it was trading in uncharted territory, it cleared all the resistance. In short, the stock has registered a strong bullish breakout. Buy this stock above ₹405. Maintain a stop loss at ₹335. The medium-term target is ₹500.

*LEGEND: ◼EMA - Exponential Moving Average. ◼MACD - Moving Average Convergence Divergence ◼RMI - Relative Momentum Index ◼ROC - Rate of Change ◼RSI - Relative Strength Index

(Closing price as of April 16, 2024) 

Disclaimer : Above recommendations are based on various technical parameters and any fundamental input has not been considered for the recommendations. Follow strict stop loss for the recommendation. 

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