Rohan Patil
Ever since Nifty50 took support near its 21- day exponential moving average on the daily chart, there is no looking back for the Index.
One of the positive technical aspects is that the momentum oscillator RSI (14) has broken its horizontal trendline resistance placed at around 65 odd levels and is now reading above 65 levels with positive crossover on the daily timeframe.
The previous intermediate top for the indicator comes around 75 odd levels, and the current break of 65 levels indicates there is still more room left for the benchmark index to trade higher.
The weekly chart is currently not providing any strong evidence for further prospects.
The 21-day exponential moving average, on the daily chart, is acting as an anchor point for the benchmark index.
It is Bank Nifty which has been leading from the front for the last couple of trading sessions and surpassed its previous intermediate top placed at 23,211.
In the previous two instances, 100- day exponential moving average created an obstacle for the banking index, but on August 24, a strong surge on the upside witnessed a breakout above its short and medium-term exponential moving averages.
We remain positive on Bank nifty with higher targets of 25,000 for the coming weeks. On the downside, initial support is placed at 22,350 which is supported by a 100- day exponential moving average on the daily chart.
A decisively break above 11,500 level will open the range for 11,800 levels, which is likely the resistance of the upper band of the rising channel pattern.
Support for Nifty is coming near 11,400 -11,300 zone.
Here are three buy calls for the next 2-3 weeks:
Gillette India | Buy | LTP: Rs 5,550 | Target price: Rs 6,000 | Stop loss: Rs 5,300 | Upside: 8%
On August 25, the stock finally managed to surpass the multiple resistance zones around Rs 5,350 –5,400 levels, which eventually confirmed a triangle pattern breakout on the daily interval.
The recent leg of strong up-move is also supported by strong volumes and it also resembles a strong consolidation breakout.
The stock is trading above its 21 and 50-day exponential moving averages on the daily chart.
Momentum oscillator RSI (14) is reading above 70 levels with positive crossover, which is positive for the counter.
The MACD indicator is reading above its line of polarity with positive sentiments. Traders can accumulate the stock in the range of Rs 5,518-5,532.
The stock, on the daily chart, has witnessed the breakout of a triangle pattern and currently looks positively poised to trade higher.
This week, the stock has given a fresh breakout above the consolidation zone along with marginally higher volumes which suggest next up-swing in the prices.
Its key technical indicators on the near-term timeframe are in buy mode. The stock has the potential to continue the current up-move and will test higher levels.
Prices are trading above 21 and 50-day exponential moving averages on the daily chart. Traders can accumulate the stock in the range of Rs 1,432-1,440.
Exide Industries | Buy | LTP: Rs 170.10 | Target price: Rs 184 | Stop loss: Rs 163 | Upside: 8%
The stock, on daily charts, has witnessed a triangle pattern breakout and is trading above its trendline support.
Momentum oscillator RSI (14) is reading above 60 levels on the daily chart with positive crossover.
The recent spurts in prices were so strong that the stock closed above its 21 and 50-day exponential moving averages.
Prices have taken support at 50 percent Fibonacci retracement at Rs 166.50 from its intermediate low of Rs 124.70 to its intermediate high of Rs 208.25.
Overall, daily and weekly chart structures look promising for the stock. Traders can accumulate the stock in the range of Rs 169–170.50.
(The author is a technical analyst at Bonanza Portfolio)
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