Shabbir Kayyumi
Nifty concluded its ‘D’ leg of ABCD harmonic pattern last week while forming a bullish Heiken-Ashi Candle on the weekly scale suggesting this corrective bullish trend is still intact. Also, the support has emerged at 20 DMA, and line of parity standing in a range of 9,100-9,200 marks.
Nifty earlier breakout of Cup and Handle classical technical pattern has the target of 10,500 marks and the pattern remains valid till it is trading above 9,200 levels. Another technical pattern that is supporting bullish bias RSI pullback setup. RSI after making a high of 62 has traded lower towards centerline placed at 45-50.
Once RSI turns upside after taking support from the zone of 45-55 levels, the target is previous swing high of RSI which was 62 or previous swing high of prices that is 9,860.
Moreover, Nifty is majorly trading in a band of 20 DMA & 50 DMA and any further price action above 50 DMA standing around 9,550 will lead to a fresh breakout while on the downside break below 9,100 will have bearish implications.
Banking Index is trading in a tight range of 2,000 points 21,000-19,000, breakout on either side will trigger the next price action.
Trade Recommendation:
Axis Bank | Rating: Buy around Rs 370 |Target: Rs 470 | Stop Loss: Rs 325 | Upside: 27 percent
The scrip spurted from a low of Rs 368 after forming a Hammer candlestick pattern, it showed pullback on upside marked the high of Rs 409 marks and started consolidating there. Currently, it is waiting for the breakout on the upside so that it can accelerate buying momentum further.
An emerging line of polarity on the daily time frame of the chart is suggesting bullish momentum in the scrip. Indicators and oscillators are also showing a conducive scenario in the coming sessions. So based on the mentioned technical structure one can go long in the scrip around Rs 370 for the target of Rs 470 marks with a stop loss of Rs 325 marks.
Tata Motors | Rating: Buy around Rs 78 | Target: Rs 92 | Stop Loss: Rs 68 | Upside: 17 percent
Daily chart of stock reveals that demand is increasing and supply is diminishing as stock is taking support from line of the parity showing a rebound from its lower levels.
Prices took support from the base of Cup and Handle price pattern suggesting the possibility of a pullback. With the chart looking attractive and decent volume participation witnessed, we recommend a buy around Rs 78 in this stock for an upside target of Rs 92, keep a stop loss of Rs 68.
DLF | Rating: Buy around Rs 128 | Target: Rs 150 | Stop Loss: Rs 112 | Upside: 17 percent
The stock witnessed sustained sell-off over the past few days, however, the strong demand zone around Rs 120-125 levels which has emerged as the support for the same.
On the weekly chart, line of polarity suggests strong base and until this break decisively. Formation of an inverted Head and Shoulder on the daily chart indicates the consistency of positive rhythm in the stock.
We expect the stock can perform going ahead and recommend buying in stock around Rs 128 with stop loss of Rs 112 for the target of Rs 150.
The author is Head of Technical Research at Narnolia Financial Advisors.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their 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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