HomeMarketsAnalysisThe Nifty rise might stop between 18,900 and 19,000, but these three...

The Nifty rise might stop between 18,900 and 19,000, but these three stocks will bring in up to 18%

They say, “Sell in May and Go Away,” but the markets have shown them that they are incorrect this time. During the whole month of May 2023, the good momentum that the domestic markets had been experiencing was sustained. During the course of the process, the index Nifty made many attempts to retest the 18,600 level and finished the month with gains of over 2.5 percent. The fact that there were no negative triggers from global markets and relatively few good news items from the local front both contributed to an improvement in morale.

We anticipated profit taking from the range of 18,200–18,500 during the month of May 2023; however, the bulls have been able to cross this zone with relative ease. The index is now trading at a level that is quite close to the 88.6 percent retracement of the full move that it made from 18,887 to 16,800.

As a result, moving forward, the previous high of 18,662 will continue to serve as an instant trigger for the bulls. If prices continue to rise above that level for an extended period of time, the index might reach a new all-time high.

We anticipate that the continued momentum will come to a stop somewhere around the 18,900–19,000 zone, since this is the positioning of a rising trendline on bigger degree charts. This is the best-case scenario. The relative strength index (RSI) for the week is now positioned such that it is hanging around a resistance line that is declining.

The volatility index, often known as the VIX, is once again quite close to the reversal zone located between 11 and 10. Historically, whenever the VIX falls below the 11 line, we have seen a significant increase in the market’s level of volatility. It is in the best interest of traders to continue recording gains from this point forward.

When looking at the chart from the bearish side, the support around 18,450 looks to be an important level. A rising trendline produced this level. A closing at 18,450 might potentially bring about the anticipated corrective impulse move in the markets.

During the month of May 2023, the Nifty Bank index achieved a new all-time high and outpaced the benchmark indexes. It reached a level very close to the 44,500 point. On the daily chart, we saw that the RSI was exhibiting a negative divergence at the same time that this price movement was occurring. In addition to this, the RSI has now reached a lower bottom than it had before.

At this point in time, the rising trendline support for the Bank Nifty is located around 43,700. In the days ahead, if the market closes lower than 43,700, it is possible that investors will start taking profits and the bulls will be forced to admit defeat. On the positive side, 44,500 seems to be a first resistance level, and only a rise over that level might potentially extend the rally beyond the 45,000 milestone.

The following are three recommendations for purchases in the near term:

Hindalco Industries: Buy | LTP: Rs 420.75 | Stop-Loss: Rs 390 | Target: Rs 445 | Return: 6 percent

Since May 2023, the aforementioned counter has been operating in free-fall mode, which has led to a 13 percent reduction in price. At this point in time, many bullish candlestick patterns, such as Hammer and Doji, have developed, and the daily RSI has reversed from 40 levels on a daily basis, which indicates that there is additional upward potential in the counter.

One may purchase in tiny increments around Rs. 415–422, and one can buy more around Rs. 410–415 on the upswing. The target price would be 445 rupees, and the stop-loss price would be 390 rupees.

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Firstsource Solutions: Buy | LTP: Rs 131.3 | Stop-Loss: Rs 114 | Target: Rs 155 | Return: 18 percent

The price of the aforementioned counter has been quite stable in the region of Rs 100–120 throughout the whole of the preceding year. It recently made a clear breakthrough and experienced high volume, both of which suggest that the counter has more upside potential.

In addition, the moving average convergence divergence (MACD) indicator is showing a bullish crossing precisely above the zero line on a weekly basis, which is a hint of continued positive momentum in the market.

Buy orders should be placed between 125 and 135 rupees, with a stop-loss order placed at 114 rupees, for a potential profit of 155 rupees.

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Central Depository Services (CDSL): Buy | LTP: Rs 1,067.90 | Stop-Loss: Rs 999 | Target: Rs 1,175 | Return: 10 percent

The price remained consistent in the range of Rs 970–1000 during the whole of May 2023. It provided a tremendous breakout combined with large volume in the previous trading session, which is a clue that bullish momentum is going to go up in the following few days.

The fact that the levels of the above-mentioned consolidation zone, which ranged from Rs. 970 to Rs. 1,000, correspond to the monthly central pivot range is the finest thing about it (refer to the chart).

One might thus purchase in modest tranches in the zone of 1,060-1,070 rupees and another 1,030-1,040 rupees, with an upside objective of 1,175 rupees and a stop-loss of 999 rupees on a daily closing basis.

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Disclaimer: The views and investment tips expressed by experts on Business Headline are their own and not those of the website or its management. Business Headline advises users to check with certified experts before taking any investment decisions.

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