Shabbir KayyumiNarnolia Financial Advisors
Nifty snapped its three-month rising streak on September 3 by making lower bottom lower top formation on its RSI chart. Although the market showed some recovery of sorts and bounced back in the last 2 trading days of the week. On Friday Nifty took a breather after taking support from 11,480 and breached previous day’s high, which now will create doubt in bear’s mind.
The appearance of bearish engulfing implies caution at the higher level. It might end with consolidation or with minor correction where it can give the opportunity to buy on dips.
On the positive side, Nifty closed on September 7 above its five-day SMA (11,541), and five-week MA (11,545), as well as its short-term moving average of 20 DMA (11,549). A decisive break and close above 11,650 levels can see the Nifty inch forward to the next levels of 11,800. As of now, some of the indicators are near the oversold zone, so a pullback is likely to continue in coming sessions. A lower time frame trend line breakout too is placed above 11,648 levels.
It was the first week on new expiry, nevertheless highest Open Interest (OI) in Put is seen around 11,500 strikes followed by 11,400 strikes though the difference is very small, whereas maximum OI in Call is around 11,800 levels. Option data indicates an immediate trading range between 11,400 and 11,800 marks.
We expect sideways to bullish movement for the coming session, within a range of 11,650 on higher side and 11,450 on the lower side.
Bank Nifty
Selling pressure was witnessed in the banking sector in the previous week and Bank Nifty traded lower and hit a low of 27,136. We expect range-bound movement for the coming sessions between 27,000 and 27,800.
Here are the stocks that are likely to give up to 23% returns:
Tata Motors DVR: Buy above Rs 150 | Target: Rs 185 | Stop Loss: Rs 133 | Upside 23 percent
Tata Motors DVR seems bottoming out at its lower levels of 133 marks from where it formed the rounding bottom pattern on weekly chart suggesting upsurge on the higher side. Sustainability above downward sloping line along with positive crossover in MACD and divergence in RSI is giving cues that scrip can take a turn on northward side. Principal of polarity can provide strong support in coming sessions. The aforementioned rationale is suggesting buy in the scrip above Rs 150 for the target of Rs 185 keeping stop loss at Rs 133 marks.
DLF: Buy around Rs 208 | Target: Rs 250 | Stop Loss: Rs 184 | Upside 20 percent
DLF has seen a sharp rebound after hitting a low of Rs 168 where its key support is seen. The emergence of Hammer candle on weekly chart is giving the possibility of pullback at higher side in coming sessions. Moreover, Prices are sustaining above its Falling wedge pattern on longer time frame of chart and currently it is testing its downward trend line through shadow of Hammer.
RSI also gave trend line breakout after bottoming out near oversold zone and weekly MACD in uptrend along with declining histogram in negative territory thus supports bullish bias in the stock. Buy around Rs 208 with stop loss of Rs 184 and target of 250 levels.
GODFRYPHLP: Buy around Rs 950 | Target: Rs 1,105| Stop Loss: Rs 848| Upside 17 percent
The emergence of green candles near foot of the falling trend line indicates up side movement in the coming sessions. Recently, it gave a strong breakout above Rs 900 levels with decent volume. Indicators and oscillators lending support to its price action. Key support is seen near Rs 862 marks near its 200 DMA. Higher highs and higher lows on daily chart is also signifying strength. Buy around Rs 950 with stop loss of Rs 848 and target of Rs 1,105.
Bharti Airtel: Buy above Rs 389 | Target: Rs 450| Stop Loss: Rs 362 | Upside 15 percent
Bharti Airtel bottomed out near the levels of Rs 331 to 335 and has been forming Inverted Head & Shoulder pattern on daily chart. Trend line and breakout is expected above Rs 395-399 zones. It has been showing upswing move towards channel resistance line from where stock can give breakout on upside. Scrip took support of falling trend line then price started moving upside.
Positive crossover in MACD on weekly chart is also creating positive rhythm in the scrip. Sustainability of RSI above 50 adds the conviction of buying the scrip above Rs 389 for the target of Rs 450 with stop loss of Rs 362 marks.
Amara Raja Batteries: BUY | Buy Around: Rs 815 |Target Rs 900| Stop Loss Rs 778| Upside 10 percent
After hitting the peak of Rs 908, Amara Raja Batteries slipped at lower levels from where chances of developing of demand is higher and prices took support from the falling line. As of now, formation of tweezers bottom on daily chart is giving cues to accumulate this stock at lower levels. Moreover, 200 DMA is seen near Rs 811 marks from where possibility of bounce back is higher.
The RSI also has bounced from the oversold zone and currently it has indicated a steep rise. As long as it sustains above Rs 778 marks, possibility of moving on upside is higher and it can hit our first target of Rs 880 and second target is Rs 920 with an ease. Buy around Rs 815 with stop loss of Rs 778 targets Rs 900.
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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