The Nifty has recently shown weakness, as it has declined for two consecutive days. On a smaller time frame, the index slipped further. Additionally, the Relative Strength Index (RSI) shows negative divergence, indicating weakening bullish momentum. Looking at the support levels, support is visible at 18,500, and if the index breaks below this level, it could fall towards 18,200. On the other hand, there is resistance at 18800 on the higher end of the index.
The Bank Nifty index witnessed a continuous battle between the bulls and the bears during the week. The index faces resistance at the 44,000 level, where the highest open interest is built up on the call side. On the other hand, support is seen at the 43500PE level, where writers are active. A break on either side of this range is likely to result in a directional shift for the index. However, the overall outlook remains bearish as long as the index remains below the 44,000 level.
Meanwhile, the Nifty Pharma index showed resilience despite overall selling pressure in the market. In fact, the index has broken out above a falling trend, indicating a change in trend towards the positive side. In addition, the index sits comfortably above a critical moving average, further supporting the notion of a potential upward move.
Looking ahead, the Nifty Pharma index could climb higher in the medium term, with a possible target range of 14,000-14,500. This indicates a bullish outlook for the pharmaceutical sector. On the downside, there is a significant support level at 12500, indicating a level at which the index could find stability during any corrective moves.
Here are two stocks to trade this week:
TVS Motor Company
Recommendation: Sell | Stop Loss: ₹1,270-1,250 | Goal: ₹1,331
TVS Motor recently declined below the consolidation stage. In addition, it has fallen below a critical moving average, indicating a bearish trend. The RSI has also shown a bearish crossover, indicating a potential downward move. On the downside, the stock may fall towards the 1250 range. Conversely, there is resistance at 1331 on the higher side, suggesting that the stock’s upward movement may face challenges.
Natco Pharma
Recommendation: Buy | Stop Loss: ₹640 | Goal: ₹750
The stock recently had a strong breakout on the daily chart, and the volume rose sharply. In addition, it also had a weekly breakout, which surpassed the previous five-week high. The RSI momentum indicator showed a positive crossover, confirming a buy signal. The stock has support at 640, and potential targets for the upside are 750.
The author is Rupak De, Senior Technical analyst at LKP Securities
Disclaimer: The above opinions and recommendations are the opinions and recommendations of individual analysts or brokerage firms, and not the views of Mint. We encourage investors to check with certified experts before making any investment decisions. live updates on
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Updated: 25 June 2023, 12:18 PM IST
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