Manish Hathiramani
The market closed at a very critical juncture this week. Short term resistance for the Nifty is seen at 9,150 levels. We would not consider this level to be respected if we were to just touch it and retrace. We need to spend an hour or so above this level so that we are convinced that enough volumes have been exchanged. After crossing of 9,150, one could trade for a target of 9,550.
However, even at that stage I would not say we are on the road to recovery. If we turn from levels between 9,550 and 9,850, it would still be a continuation of the existing bear market! In order to move into bull territory, we would need to see this market trading above 10,500 levels. Until then, one can continue seeking short-term trading opportunities.
On the flip side, if the market decides to take the much-feared U turn, the short-term support stands at 8,700. But the level to keep a close eye on would be a closing below 7,500. A breach of this level could be fatal and could result in the market heading southwards all the way to 6,800.
The Bank Nifty faces short-term resistance at 20,360. If we were to cross it, we could achieve a target of 22,000. To enter bull territory, we would need to close above 25,700. Until then, one can continue seeking trading opportunities. In case of a reversal, the next short term support stands at 18,400. A breach of that could take us down to 16,100 and then 15,000 levels.
Interesting stocks to keep on the radar on the long side would include HDFC Bank, Axis Bank and ICICI Bank. Other names that look interesting would be Reliance Industries, GAIL, ONGC, Cipla, Sun Pharma and Vedanta.
HDFC Bank: The stock faces resistance at Rs 950. If we can surmount that, it can move to Rs 1,075 and then Rs 1,200. Maintain a stop loss at Rs 800.
Axis Bank: Upon crossing Rs 430, this stock can zoom to Rs 530 and then Rs 650. The stop loss on this trade would be Rs 320.
Reliance Industries: This stock is close to its resistance of Rs 1,240. If we sustain above it, it can move towards Rs 1,475 and then Rs 1,530. A stop loss needs to be maintained at Rs 1,010.
The author is Proprietary Index Trader & Technical Analyst at Deen Dayal Investments.
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.
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