Nifty seems to have strong resistance near 18,000-mark, says Vinay Rajani

Among stocks, the technical analyst from HDFC Securities recommends buying M&M Finance and Indian Bank

Nifty registered a 400-point recovery from the recent swing low of 17,613. On 2nd November 2021, Nifty made a high at 18,012 and reversed south, to close at 17,889. There are multiple evidences, which signal strong resistance for the NSE index near 18,000 levels. The 20-day SMA, 38.2 per cent retracement of the swing seen from 18,604 to 17,613 are indicating strong resistance around the 18,000-mark for the Nifty. A close above 18,000 on the Nifty could push the index towards the next resistance of 18,342. Support for the Nifty is seen at 17,800.

Buy M&M Finance (Rs 197)
Target Rs 210

Stop-loss Rs 190

The stock has broken out after consolidating for 5 weeks. The price breakout is accompanied with rise in volume, and the stock has been holding above its medium to long term moving averages. The stock has been one of the outperformer in the NBFC space in last couple of months. Indicators and oscillators have turned bullish on both the daily and weekly charts. The stock has also been forming higher tops and higher bottoms on weekly charts.

Buy Indian Bank (Rs 172.60)
Target Rs 190
Stop-loss Rs 160

The stock has broken out from ascending triangle on the weekly charts. The Stock price has shown throw-back towards the previous breakout levels, which can resume the primary uptrend after a running correction. The Nifty PSU Bank Index has broken out from medium term downward sloping trend line on the weekly charts. The stock price has surpassed the previous two tops on the weekly chart and the price breakout is accompanied by higher volume. The primary trend of the stock has been bullish with higher tops and higher bottoms and the stock has also been holding levels above its medium to long term moving averages.

Vinay Rajani, Technical Research Analyst, HDFC securities. Views expressed are personal