Gaurav Ratnaparkhi
Unless Nifty retreats below its crucial daily moving averages, which are near 10,350-10,250, it has a scope to stretch till 10,560-10,700 on the upside.
The Nifty, in the week gone by, witnessed third successive positive week. During the course of the rise the index has surpassed multiple parameters including its crucial daily as well as weekly moving averages, which will now act as supports.
Since February this year, on the occasions of minor degree bounces, the index was facing resistance near its crucial daily moving averages. This time, however, it has defied the structure as it has climbed above the hurdles without ambiguity.
This opens up an alternate wave count suggesting a larger pullback. In other words, the Nifty is expected to retrace the entire fall from 11,171 to 9,951.
In terms of Fibonacci retracement, the pullback is attempting a deep retracement with key levels at 50 percent & 61.8 percent retracement marks i.e. 10,560 & 10,700 respectively. The hourly chart shows that the entire rise is a well channelised one, which continues to guide the index higher.
The Nifty, however, has seen a straight rise over last few sessions thus indicating that it can pause for a breather before stretching higher.
Hence from trading perspective, a potential minor degree dip or a consolidation can be taken as an opportunity to initiate fresh long position.
On the downside 10,400-10,350 is a key support zone from near term perspective, which can induce fresh buying interest. Unless Nifty retreats below its crucial daily moving averages, which are near 10,350-10,250, it has a scope to stretch till 10,560-10,700 on the upside.
India Cements, in its recent rise, formed an Impulse on the upside. The same has been retraced nearly till 61.8 percent retracement mark. The Golden Ratio mark is a high probability level for the next set of Impulse to start off on the upside.
In terms of the price patterns, the stock has a potential to form an Inverted H&S, which is a bullish pattern. Also the short term momentum indicators are in line with the bullish expectation.
We have a buy on the stock with target at Rs 165 and stop loss at Rs 144.
Disclaimer: The author is Senior Technical Analyst, Sharekhan. 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.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
