Jaydeb Dey
The Nifty on Wednesday ended 0.86 percent higher at 10,684.65. It opened the session on a subdued note, recovered above the critical resistance placed around 10,630 levels, before ending the session near the day’s high with a bullish body candle.
This candle pattern suggests that the benchmark Index is likely to challenge its critical resistance placed around 10,760, with midway resistance around 10,700 levels. 10,630 will continue to act as pivotal support now.
On the Nifty hourly chart, it moved above all critical moving averages nearer to the day’s high. Chart patterns suggest this upmove is likely to continue further towards 10,700 and 10,760 levels.
Nifty patterns on multiple timeframes show that a recovery above the 10,630 mark with a bullish body candle implies continuation of this pullback towards 10,700 and 10,760 levels. Downside critical support is placed around 10,630 levels.
The Bank Nifty ended Wednesday 0.44 percent higher at 26,367.60. It moved higher from its the mid-term upward trend line support placed around 26,100 and ended the session with a Hammer candle. Upside resistances are placed around 26,500 and 26,600 levels. 26,100 may continue to act as pivotal support in today’s session as well.
View on June 7 Bank Nifty Fut weekly expiry:
Bank Nifty Option Chain analysis in terms of percentage change in OI (at the end of yesterday's session)- Bank Nifty Fut (CMP- 26,391.50) ended at around 24 points premium against Bank Nifty (CMP- 26,367.60).
Maximum long OI build up in 26100-PE followed by 26000-PE, 25900-PE and, 25800-PE against long OI build up in 26500-CE, 26600-CE, 26700-CE and, 26800-CE ahead of today’s expiry suggests, Bank Nifty Fut is likely to face resistance on rise around 26,600.
Bank Nifty Fut is likely to see intraday selling pressure on rise around 26,600. On a similar note, intraday trend is expected to remain volatile within the price band of 26,600-26,100. Breaking down 26,100 may unfold a quick downfall towards 25,800.
This view is subject to change if and only if Bank Nifty Fut starts moving decisively above 26,600.
Based on a thorough technical study, the research firm recommends Hindalco Industries for the short term:
Hindalco Industries | Rating: Buy | Target: Rs 257, stop loss: Rs 242, Return: 3%
After a prolonged consolidation, the stock ended the session with a bullish body candle above critical resistance placed around Rs 247. Consolidation breakout backed by advance breakout in daily RSI makes it a valid breakout. Rising positive Open Interest in last few session makes the bull case even stronger.
Based on above mentioned observations, the firm recommends Hindalco as a buy on dips for the short term upside target of Rs 257.
Disclaimer: The author is Technical Analyst at Stewart & Mackertich Wealth Management Ltd. The views and ideas expressed above may have been suggested to the clients of Stewart & Mackertich Wealth Management Ltd. It is advised that investors/traders should consult with their Certified Experts before taking any investment decision.
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