Shabbir Kayyumi
Nifty is trading in a rising wedge formation where upper ascending trend line is standing around 12,000 marks and break down will be below lower trend line standing around 11,500 levels.
Market was trading in a tight range from last few days and a breakout above 11,700 has confirmed strength in rally. The index has support near 11,500-11,600 and resistance at 11,975 where the upper Bollinger band stands at. Move above this push prices higher towards previous life high at 12,100 and further towards 12,400 levels.
However, since majority of the oscillators are in overbought zone, possibility of prices retracement towards a unfilled gap placed around (11,606-11,583) cannot be ruled out which can extend towards ascending trend line standing around 11,500 marks.
Interestingly, Nifty has seen 84 percent of rollover on Thursday, higher than the last series rollover data (73 percent). We expect continued optimism with trading range of 11,500-12,400 and one can opt for buy on dip strategy.
Bank Nifty
Banking index closed above mid-term moving average (100 DMA) placed at 29,300 levels indicating strength in current up move, move above the resistance at 30,400 may extend rally towards 31,000 levels. The trading range for banking index will be 29,300-31,000 for the coming week.
JSW Energy | Buy above Rs 68.90 | Target: Rs 80 | Stop Loss: Rs 63 | Upside 16 percent
This Scrip spurted from a low of Rs 58, it showed pullback on upside marked the high of Rs 68.90 marks and started consolidating there. This pullback rally and consolidation has taken the form Pole & Flag patter from last few days. Currently, it is waiting for the breakout on upside so that it can accelerate buying momentum further.
Emerging line of polarity on daily time frame of chart is suggesting bullish momentum in the scrip. Indicator and oscillator are also showing conducive scenario in the coming sessions. So based on the mentioned technical structure one can go long in the scrip above Rs 68.90 for the target of Rs 80 marks with stop loss of Rs 63 marks.
The Indian Hotels Company | Buy around: Rs 148 | Target: Rs 168 | Stop Loss: Rs 138 | Upside 13 percent
The stock has formed an Inverse Head and Shoulders trend reversal pattern in the Daily charts. The momentum indicator MACD has crossed the signal line indicating a start of a trend. The RSI indicator too is above its key 50 mark indicating positive momentum on its side. Further momentum would be seen once Rs 156 levels are taken out. We recommend a buying around Rs 148 with a stop loss of Rs 138 for the target of Rs 168.
Tata Steel | Buy around: Rs 390 | Target: Rs 440 | Stop Loss: Rs 360| Upside 12 percent
The counter appears to have formed a short term bottom near the lower base of double bottom on weekly chart from where it attracts buying interest. Formation of Bullish belt hold on daily chart suggests strength. Buying momentum will accelerate above Rs 390 where pattern breakout is expected. Price sustainability above 20 &50 DMA’s in coming sessions imply further strength. Declining histogram of MACD on weekly chart is also suggesting upside momentum.
Positional trader can create fresh long position around Rs 390 with a stop below Rs 360 on closing basis for an initial target of Rs 440.
(The Author is Head of Technical & Derivative Research at Narnolia Financial Advisors Ltd.)
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