Vinay Rajani recommends buy on dips strategy; Nifty support seen at 16,000

The technical analyst from HDFC Securities recommends buying Transport Corporation of India basis charts

Nifty View

The Nifty has been falling in the last two trading sessions. The NSE benchmark seems to have found resistance at 16,414 and reversed south. Further, the markets have been highly volatile and choppy for last couple of weeks. 

Last week, the Nifty managed to hold its level above Feb 2022 Bottom of 15,671 and made a higher bottom at 15,775. The recent swing high was formed at 16,414, above which Nifty would confirm a bullish trend reversal. The support for the Nifty has now shifted up to 16,000.

Breadth Indicators, like the number of stocks above their 200-DMA and number of stocks making 52-week highs, indicates that breadth of market has probably bottomed out and dips should be bought in to. 

Transport Corporation of India

BUY

Target: Rs 825

Stop Loss: Rs 720

Last Close: Rs 755

The stock is placed above the 20, 50 and 200 days EMA, which indicates the bullish trend on all time frames. The stock price has surpassed the previous swing high resistance of Rs 764. Indicators and oscillators like RSI, DMI and MACD have been showing strength in the current up move.

(Vinay Rajani, Senior Technical and Derivative Research Analyst at HDFC securities. Views expressed are personal).