Edited excerpts from a chat:
How to read the momentum we saw in the last three trading sessions, which helped the Nifty post a weekly gain of 1%. How close are we to reaching 26,400?
After breaking above the previous swing high, the trend seems very positive. This, combined with a bullish crossover of the 20 EMA and 50 EMA, indicates a strong uptrend. The RSI on the daily time frame has also broken out of its previous consolidation range, indicating improving momentum. Overall, the technical chart setup points to smart upside in the short term.Moreover, 73% of Nifty 50 stocks are currently trading above their 50 EMA, a sharp improvement from 52% three days ago, indicating strengthening breadth and improving sentiment in the large-cap space.
The trend is likely to remain strong in the short to short term, with a buy-on-dips strategy favoring the bulls as long as the index remains above 26,000. On the higher side, a decisive move above 26,350 could trigger a move towards 26,600 in the near term.
Nifty Bank touched a new high and performed excellently. How would you trade the index before earnings season?
The Bank Nifty has remained a clear outperformer against the Nifty over the past few sessions. A break in the downtrend line, along with the recovery of key short-term moving averages, has been a tailwind for the index. The index is now in a strong momentum zone, increasing the likelihood of a move towards 61,500 in the near term.
On the downside, immediate support is at 59,500; a sustained move below this level could weaken the current trend.
Given the sharp sell-off in ITC stock, do you think the stock is now showing signs of being at the oversold level? Is it time to buy the fear?
Although shares have fallen sharply and entered the oversold zone, buying at current levels seems risky. On the weekly chart, the stock has broken decisively below the 200-week EMA for the first time since March 2022, indicating an increase in long-term weakness. Therefore, a sell-on-rally approach is recommended, rather than buying at current levels.
Force Motors was among the top winners of the week. How would you trade the stock on Monday?
The stock has witnessed a strong rally over the past week after breaking out of consolidation. A buy-on-dips strategy offers a better opportunity to participate in the movement. On the other hand, the 20,000–20,200 zone can provide a favorable entry area, with a stop loss at 19,000. On the plus side, the stock has the potential to rise towards 24,000 in the near term.
Give us your best ideas of the week
Buy SYRMA@742 | SL: 714 | Goal: 790
After correcting in the November-December period, the stock has witnessed renewed buying interest near recent lows. The RSI is in a bullish crossover and indicates a positive divergence. Sentiment is likely to improve further once the stock moves decisively above 750. On the upside, the stock could move towards 790, while on the downside, support is at 714.
Buy LTF @ 320 | SL: 309 | Goal: 345
The stock is consolidating after a breakout and strong rally, suggesting it may be preparing for the next sharp rise. Moreover, the price has risen above the 21 EMA, with the 21 EMA and 50 EMA forming a bullish crossover. The daily RSI has shown a clear breakout, indicating strengthening momentum. On the upside, the stock could move towards 345, while support on the downside is at 309.
Buy UNOMINDA @ 1,320 | SL: 1,280 | Goal: 1,400
The price has moved above a recent consolidation zone on a daily basis, with the sharp price increase supported by strong volumes. The RSI is in a bullish crossover and continues to rise. Moreover, the stock is trading comfortably above the 200 DMA, confirming a long-term uptrend. The daily RSI has also witnessed a clear breakout. On the upside, the stock could move towards 1,400, while support on the downside lies at 1,280.
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