A breakout of descending trend line on lower time frame will occur only above 10,881, suggesting a tight range for the index—10720 to 10881
Benchmark index failed to capitalise gains after giving breakout from its sideways range on the first trading session of last week and succumbed to profit booking on higher levels. However, the market has managed to sustain above its important mid-term moving average 50-DMA, which is placed around 10,770.
Nifty is making higher high and higher low formations since last three weeks, indicate a continuation of uptrend unless previous week low is breached. The index is also witnessing higher peak higher trough formation since last one month on weekly charts. A close below 10,720 will negate this formation, till then it can continue higher swing pattern.
A breakout of descending trend line on lower time frame will occur only above 10,881, suggesting a tight range for the index—10,720 to 10,881. On breaching 10,720, the index can slip down till 10,640 and 10,550 levels.
Bank Nifty: Banking index is trading in rising wedge pattern having lower side support of strong trend line around 27,000. A descending trend line breakout on lower time frame is expected above 27,585, which can push prices higher towards 27,900.
At the same time, oversold oscillators suggest down move can halt on lower side making a possible trading range of 27,500-27,900.
Yes Bank | Buy around Rs 220| Stop loss: Rs 205 | Target: Rs 250 | Upside: 14 percent
After hitting the peak of Rs 404, the stock slipped at lower levels from where it rebounded sharply as prices took support from the previous support on the daily chart. As of now, the formation of cup and handle on the daily chart is giving cues to accumulate this stock at lower levels.
On the other side, RSI has been following positive trajectory from last few days and it has indicated a steep rise. As long as it sustains above Rs 205, possibility of moving on upside is higher and it can hit our first target of Rs 250 with ease. Buy Yes Bank around Rs 220 with stop loss of Rs 205 and target Rs 250.
Glenmark Pharma | Buy above Rs 658 | Stop loss: Rs 635 | Target: Rs 715 | Upside: 9 percent
The counter appears to have formed a short-term bottom as it is repeatedly attracting buying interest around Rs 658-660.
Formation of diamond bottom pattern on the daily chart is a reversal pattern that indicates upside move. Buying momentum will accelerate above Rs 658 where pattern breakout is expected and it can attempt to retest its interim top in coming sessions.
Declining histogram of MACD also suggests upside momentum. Positional traders can create fresh long positions above Rs 658 with a stop below Rs 635 on closing basis for an initial target of Rs 715.
Bandhan Bank | Buy around Rs 425 | Stop loss: Rs 404 | Target: Rs 460 | Upside: 8 percent
The Stock bottomed near Rs 405-407 and has been consolidating for last few days on the daily chart. Emergence of green candles near the support line on the daily chart indicates upside movement in the coming sessions. Daily momentum indicator RSI seems to be turning northward creating positive rhythm in the scrip.
Furthermore, bullish crossover in MACD adds the conviction of buying the scrip around Rs 425 for the target of Rs 460 with a stop loss at Rs 404.
GAIL | Buy at Rs 335 | Stop loss: Rs 320 | Target: Rs 360 |Upside: 7 percent
The stock has corrected from the peak of Rs 399 to Rs 295 and takes support at lower levels. Now it has regained strength indicating a positive bias. Double bottom breakout on the daily chart also shows strength. Emergence of bullish engulfing on weekly chart further shows strength.
We anticipate the stock to rise further in the coming days. With strength in volume, one can take long position at Rs 335 for the target of Rs 360 with a stop loss at Rs 320 on closing basis.
ICICI Bank | Buy around Rs 355 | Stop loss: Rs 339 | Target: Rs 381 | Upside: 7 percent
The scrip seems to form a bottom near Rs 350-355 after hitting high of Rs 383. Principal of polarity shows strong support at lower levels. Moreover, it has been trading above all its important moving averages that can aid a strong move on upside.
Further, indicator and oscillator are looking conducing for upside move. One can take long position at Rs 355 with stop loss at Rs 339 for the target of Rs 381.
The author is Head - Technical & Derivative Research at Narnolia Financial Advisors.Disclaimer: 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.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.