By Aditya Agarwala YES Securities (I) Ltd
The Nifty50 index started the April F&O series on a positive note gaining in excess of 1 percent on Monday. Further, it is approaching its upper-end of the channel resistance placed at 10,290 which also happened to be the 61.8 percent Fibonacci retracement level of the recent decline (i.e. 10490-9960).
A successful breakout from the channel on healthy volumes can extend the current pullback to levels of 10430-10640 levels. However, failure to trade above 10290 can resume the corrective wave dragging the Index lower to levels of 10080-10000.
Technical oscillator such as the relative strength index or the RSI has turned upwards after taking support at the 40 level i.e. formed a higher low suggesting a temporary pause in the corrective wave and price has closed above the 200-DMA making room for more upside.
Moreover, a move above the 50 level can extend the short covering rallies in the coming trading sessions.
On the daily chart, Capacit’e Infraprojects Ltd. (CAPACITE) is on the verge of a breakout from the channel pattern after taking support at the 127% Fibonacci extension level placed at 290 (as indicated on chart).
Capacit'e Infraprojects Ltd: BUY | Target: Rs 360 | Stop loss: Rs 285 | Return 17%
A sustained trade above Rs 320 can trigger a breakout from the channel resuming the uptrend. On the weekly chart, the stock has turned upwards after forming a tweezers bottom suggesting bull trend reversal on cards.
Moreover, RSI formed a positive divergence with price affirming bullishness building up in the stock. The stock may be bought in the range of Rs 306-310 for targets of Rs 340-360, keeping a stop loss below Rs 285.
Disclaimer: The author Technical Analyst at YES Securities (I) Ltd. The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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