Rajesh Palviya
Nifty started the week ended January 3 on a flat note and remained lackluster within narrow trading range throughout the week. Nifty closed at 12,227 with a loss of 19 points on a weekly basis.
On the weekly chart, the index formed a small bearish candle forming higher High-Low compared to the previous week indicating positive bias. Index is consolidating in the range of 12,300-12,130 indicating short term sideways movement hence any breakout on either side will lead to a further directional move.
The chart pattern suggests that if Nifty crosses and sustains above 12,300 levels it would witness buying which would lead the index towards 12,360-12,450 levels. However if index breaks below 12,150 level it would witness selling which would take the index towards 12,080-12,000.
Nifty is trading above 20, 50 and 100 day SMA's which are important short term moving average, indicating positive bias in the short to medium term. Nifty continues to remain in an uptrend in the medium term, so buying on dips continues to be our preferred strategy. For the week, we expect Nifty to trade in the range of 12,300-12,000 with mixed bias.
The weekly strength indicator RSI and momentum oscillator Stochastic have both turned positive and are above their respective reference lines indicating positive bias.
Bank Nifty
Bank Nifty started the week on a positive note, however, witnessed profit booking at higher levels to end the week in the red. Bank Nifty closed at 32,069 with a loss of 343 points on a weekly basis.
On the weekly chart index has formed a bearish candle however it managed to maintain higher High-low compared to previous week which remains a positive sign. Since the last three consecutive weeks, the index has been consolidating at 32,600-31,950 levels indicating sideways trend. The chart pattern suggests that if Bank Nifty crosses and sustains above 32,600 levels it would witness buying which would lead the index towards 32,800-33,150 levels. However if index breaks below 31,900 level it would witness profit booking which would take the index towards 31,600-31,000 levels.
Bank Nifty is well placed above its 20, 50 and 100 SMA, indicating sustained uptrend in the short to medium term. The index continues to remain in an uptrend in the medium term, so buying on dips continues to be our preferred strategy. For the week, we expect Bank Nifty to trade in the range of 33,600-31,300 with mixed bias.
The weekly strength indicator RSI is moving upwards and is quoting above its reference line indicating positive bias. However, momentum oscillator Stochastic has turned negative from the overbought zone indicating a possible consolidation or a down move in the near term.
Here is the list of four stocks which could return 4-14 percent in short term:
Central Depository Services (India) | Buying Range: Rs 242-238 | Stoploss: Rs 232 | Target: Rs 258-268 | Return: 8-12 percent
The stock has made a new 52-week high with high volumes this week on closing basis indicating good participation by the bulls. On the weekly chart, the stock price has broken out from a nine month long "Cup and Handle" formation indicating further continuation of bullish trend.
It continues to make a series of higher Tops and higher Bottoms indicating sustained uptrend. Weekly strength indicator RSI and momentum oscillator stochastic are in positive territory which supports upside momentum to continue in the near term. Stock price is sustaining well above its 20 and 50 and 100 day SMA which supports bullish sentiments ahead.
Rain Industries | Buying Range: Rs 106-104 | Stoploss: Rs 99 | Target: Rs 116-120 | Return: 10-14 percent
On the weekly chart, the stock price has given a breakout from a four-month-long "Symmetrical Triangle" formation indicating trend reversal. This symmetrical triangle breakout is accompanied with high volumes indicating good participation by the bulls.
The weekly strength indicator RSI is in positive territory and stochastic indicator has made a higher low which supports upside momentum to continue in the near term. Stock price has also bounced from the 20 and 50 day SMA(98) which supports bullish sentiments ahead.
Jubilant Foodworks | Buying Range: Rs 1,660-1,630 | Stoploss: Rs 1,615 | Target: Rs 1,710-1,745 | Return: 4-6 percent
On the daily chart, the stock price has decisively broken out its past two month consolidation range (Rs 1,550-1,650) and has registered a new all time highs. It also continues to make a series of higher Tops and higher Bottoms indicating sustained uptrend.
On the daily chart, MACD indicator has recently given a bullish crossover which supports upside momentum to continue in the near term. On weekly chart, high volumes are observed indicating good participation by the bulls. Stock price is well placed above its 20 and 50 day SMA which supports bullish sentiments in short to medium term.
Torrent Pharmaceuticals | Buying Range: Rs 1,890-1,860 | Stoploss: Rs 1,832 | Target: Rs 1,960-1,985 | Return: 5-6 percent
On the daily chart, the stock price has taken support from a 3-month long up sloping channel indicating sustained uptrend. It has also broken out from a major resistance of Rs 1,880 levels representing sustained uptrend. On daily chart, stock has also closed above the upper Bollinger band for the first time in last one month indicating strong uptrend.
The daily strength indicator RSI and the momentum indicator Stochastic both are in positive territory which supports upside momentum to continue in the near term. Stock price has bounced from the 20-day SMA with good volumes indicating good participation by the bulls.
(The author is DGM - Research (Head Technical & Derivatives Research) at Axis Securities.)
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.
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!
