Shabbir Kayyumi
Nifty showed volatile movement throughout last week and finally settled with almost a 2 percent gain. The index has not only closed above crucial resistance of 10,200, but also managed to trade above 100 DMA. Weekly Heikin Ashi candle is continued as a bullish flat bottom candle with higher high clearly suggesting bulls domination in the market. Healthy upside movement can be seen in a lot of mid-cap & small-cap stocks as well.
Nifty is now trading above 20 DMA, 50 DMA, and also the 100 DMA. Next logical stop for the current rally in the market is 200 DMA placed around 10900 marks. Nifty also has given a breakout of Cup and Handle larger degree pattern and targets as per this pattern comes to 11,200 and this pattern is intact as long as the index is giving higher weekly closing.
However, on the lower side crucial support is seen at 10,000 and any decisive move below this zone can push index lower towards the previous swing low placed around 9,700.
The banking index, Bank Nifty bounced back from an early correction in the last week but traded in a range of only 1,500 points. Bullish crossover of 20 DMA and 50 DMA suggests bullish movement ahead in mid-term and prices can trade higher towards 100 DMA placed around 23,300 marks.
Punjab National Bank | Rating: Buy around Rs 34 | Target: Rs 43 | Stop Loss: Rs 29 | Upside: 26 percent
Scrip spurted from a low of Rs 26 after forming cup and handle pattern, it showed pullback on upside marked the high of Rs 35.50 marks and started consolidating there. Currently, it is waiting for the breakout on upside so that it can accelerate buying momentum further.
The emerging line of polarity on daily time frame of chart is suggesting bullish momentum in the scrip. Indicator and oscillator is also showing conducive scenario in the coming sessions. So based on the mentioned technical structure one can go long in the scrip around Rs 34 for the target of Rs 43 marks with stop loss of Rs 29 marks.
Oil & Natural Gas Corporation | Rating: Buy around Rs 85 | Target: Rs 104 | Stop Loss: Rs 73 | Upside: 22 percent
Daily chart has witnessed trend line breakout and is trading above the trend line support. Momentum indicator RSI is also trading above 60 with bullish crossover on the cards. Along with that line of polarity is providing support near the base of the chart.
Meanwhile, MACD indicator is likely to reverse and seems to have bottomed out on daily chart suggests upside momentum. Trader can accumulate the stock around Rs 85 with stop loss of Rs 73 for the target of Rs 104.
ICICI Prudential Life Insurance Company | Rating: Buy around Rs 390 | Target: Rs 450 | Stop Loss: Rs 350 | Upside: 15 percent
Daily chart of stock reveals that demand is increasing and supply is diminishing as stock is taking support from line of parity showing rebound from its lower levels. Price have been trading above the consolidation phase after giving breakout for last few days and also forming cup and handle price pattern indicating strength from bottom.
With the chart looking attractive and decent volume participation witnessed, we recommend a buy around Rs 390 in this stock for an upside target of Rs 450 keep a stop loss of Rs 350.
(The Author is Head of Technical Research at Narnolia Financial Advisors Ltd.)
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