Technical experts at Narnolia expect sideways to bullish movement for coming session.
Narnolia Financial Advisors
The domestic market continued its stellar rally after giving a gap-up opening on last Monday. The Nifty hit the record high level of 11,760. Benchmark indices marked record high, but gains got muted and it lost sheen in the second half of the week.
As of now, no reversal in price pattern is seen on the weekly chart, although overbought level on stochastic oscillators (94) is indicating some profit booking at upper levels.
Although Nifty was lower in the last 2 trading days of the previous week, closing below 11,650 would be alarming for the bulls, till then upside move is intact even on a very small timeframe. On Friday, the index took a breather after making a support from the previous low, but breached previous day’s high keeping bears in doubt.
Lower time frame trend line breakout will be above 11,710 levels, which will push prices to higher levels. A decisive break and close above 11,750 levels can inch Nifty forward to the next levels of 11,900 in the coming week.
Looking at rollover data, the 50-share index has a rollover of 68% higher than 6-month average (67%) and 3-month average (66%) & along with OI data of futures indicates positive tone for next expiry.
It is the first week on new expiry, nevertheless highest Open Interest (OI) in Put is seen around 11,600 strikes followed by 11,500 strikes, with only 32 lakh build up whereas maximum Open Interest (OI) in Call are around 11,800 levels, followed by 12,000.
Options data indicates an immediate trading range between 11,600 and 11,800 marks.
We expect sideways to bullish movement for coming session, within a range of 11,900 on the higher side and 11,550 on the lower side. However, sector-specific action can be seen.
For the Bank Nifty, sideways to bullish movement in a range of 27,600-28,600 is seen. However, the possibility of trading to new life high cannot be ruled out, once it decisively trades higher side of the range. Majority of banking charts suggests Bank Nifty will outperform Nifty in coming sessions.
GSFC: BUY | Buy Range: Rs 118 - Rs 120 |Target Rs 145| Stop Loss Rs 108| Upside 21%
The stock has been trading above its previous months’ highs for last few days. Recently, it took a support from its 200 WMA which is around 100 marks. The appearance of Inverted Head &Shoulder suggests a reversal in the counter on the upside. Higher top and higher bottom formation indicate strength on the chart. A decisive close above 121 will lend the prices further higher. Trader can take entry around 120 for the target of 145 with stop loss of 108 marks.
Apollo Tyres: BUY | Buy Range: Rs 248- Rs 252 |Target Rs 300| Stop Loss Rs 227| Upside 20%
After showing a peak near Rs 300, it showed a sharp decline towards its previous trough where the principal of polarity indicate that scrip can bottom out at its lower levels. The positive divergence in RSI implies potential reversal is around the corner.
Moreover, other indicators and oscillators are in an oversold zone which is also showing the possibility of a bounce back on upside. One can take long position around 248-252 with the stop loss of 227 for the target of 300.
Dr Reddy’s Labs: BUY | Buy Range: Rs 2480- Rs 2495|Target Rs 2920| Stop Loss Rs 2214| Upside 17%
Sustainability above 61.8% Fibonacci retracement suggests that stock has a potential to move further higher. It gave trend line breakout on the weekly chart above the levels of 2520 with decent volume which is also looking bullish for the stock. Along with that positive divergence in RSI on weekly chart and breakout above spring in prices above 2510 will lend it further higher. One can take entry around 2480- 2492 with the stop loss of 2214 for the target of 2920.
TVS Motor: BUY | Buy Range: Rs 565-Rs 570|Target Rs 665| Stop Loss Rs 506| Upside 17%
The stock recently bottomed out On 31 JUL 18 around 507 levels and then rallied more than 10% after that prices formed a Double bottom price pattern. The MACD has given bullish crossover in positive territory on daily chart giving the implication of further strength. Double bottom price break out is expected above 560 marks and RSI has already given trend line breakout which further confirms its bullish bias.
Strong support is seen near 500-510 levels where congestion zone is seen which suggesting further strength. We suggest to long TVS MOTOR around 565-570 with SL of 506 for the target of 665.
Maruti Suzuki: BUY | Buy Range: Rs 9080 - Rs 9100|Target Rs 9850| Stop Loss Rs 8748| Upside 8%
On a weekly chart, the stock has taken a support from its horizontal trough due to the concept of point of parity which indicates halt in the downswing of the scrip. On a daily chart, stock has a strong support zone at 9026 which is near its 200 DMA.
Moreover, Bullish crossover in MACD indicates positivity in the counter. A daily momentum indicator RSI suggests that it may take support from its oversold zone. Based on the above technical set up, we are expecting an upside momentum in the counter in the coming days for the target of 9850 with the stop loss of 8748 marks.Disclaimer: The author is Head - Technical & Derivative Research, Narnolia Financial Advisors. Views and investment tips expressed by investment experts on Moneycontrol are their own, and not that of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.The Great Diwali Discount!
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