By Nagaraj Shetti

After showing an excellent upside recovery from the important support of 17000 mark, Nifty failed to continue with follow-through upmove on Wednesday and closed the day lower by 69 points. After opening on a positive note on Wednesday, the market moved up in the early part and formed a new swing high at 17442 levels. It failed to sustain the highs and started to show weakness gradually. The decline amidst range movement continued from mid to later part of the session and intraday upside bounces in between have been sold into.

The short term uptrend status of Nifty remains intact and the positive chart pattern like higher highs and lows is active as per daily timeframe chart. Further weakness from here could find strong support around 17100-17000 levels. A sustainable upmove above the immediate hurdle of 17500 levels could pull Nifty towards the next resistances of 17650 and 17800 levels respectively.

Stock Picks:

Buy RAYMOND LTD

After showing range bound action in the last 6-7 weeks, the stock price (Raymond) has witnessed a decisive upside breakout in this week so far. This pattern indicate an attempt of decisive upside breakout of range movement at Rs 800-820 levels. This is positive indication. The larger positive sequence like higher tops and bottoms is intact as per weekly chart and previous such range movements have eventually resulted in a sharp upside breakouts in the past. Volume and weekly RSI are supporting further upside for the stock price ahead.

Buying can be initiated in RAYMOND at CMP (Rs 773.50), add more on dips down to Rs 742, wait for the upside target of Rs 852 in the next 3-4 weeks. Place a stoploss of Rs 720.

Buy VIP INDUSTRIES LTD

The intermediate uptrend of the stock price (VIP) remains intact, as we observe a larger positive sequence like higher tops and bottoms over the last many months, as per weekly timeframe chart. After showing downward correction amidst a range movement in the last 5-6 weeks, the stock price is now showing early signs of an upside breakout of the range at Rs 660-680 levels. Weekly 10 and 20 period EMA are intact and are offering supports for the stock price. Volume has started to expand during upside breakout in the stock price and weekly RSI placed above 60 levels.

One may look to buy VIPIND at CMP (Rs 638.60), add more on dips down to Rs 610 and wait for the upside target of Rs 708 in the next 3-4 weeks. Place a stoploss of Rs 590.

(Nagaraj Shetti is a Technical Analyst at HDFC securities. Views expressed are the author’s own. Please consult your financial advisor before investing)

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