Nifty doesn't have enough strength to go pass the sturdy wall of 11,650-11,700 soon.
It must either go through some time-wise or price-wise correction before heading towards the 12,000-mark.
We observed a 'Bearish Wolfe’ pattern on the hourly chart at the end of last Wednesday's session. The said pattern proved its worth as we witnessed some hiccups towards the later part of the last week.
Since, the overall undertone is strongly bullish, as of now, there are no signs of complete sell-off rather it can be interpreted as small profit-taking.
For this week, 11,600-11,650-11,700 remains to be a cluster of resistance, whereas, on the lower side, 11,450-11,380 are crucial support.
A breach below these points would result in an extended correction in our market.
In the last three weeks, we had a couple of reality checks which may be seen in the moves, going forward.
Hence, one needs to stay cautious and should ideally avoid aggressive bets.
One needs to keep a close track on how the banking space behaves in the first half of the week.
IT and pharma space did well last week. One can still look to participate in them but should adopt a proper risk-management strategy.
Here are two buy calls for the next 2-3 weeks:
RPG Life Sciences | Buy | LTP: Rs 404 | Target price: Rs 448 | Stop loss: Rs 374 | Upside: 11%
The entire pharma space just took off in the latter half of the week gone by after a brief pause of a few weeks.
Initially, the move was led by some of the frontline counters on the back of extremely positive news flow for this sector and then it just started rubbing off on smaller names.
RPG Life had been in a consolidation mode for three weeks after a stellar run since March lows.
Last Friday, the stock prices just spurted after surpassing the recent hurdle around Rs 390.
The volume was gargantuan in the upsurge and hence, we will not be surprised to see this stock heading higher from here on.
During the current pandemic, the entire world is heavily dependent on technology as it has become one of the essentials.
A lot of IT and IT-related stocks are enjoying a dream run. Quick Heal is one of the marquee cybersecurity software companies which has gained some traction over the past 2-3 months.
However, the way this stock performed over the past one and a half weeks, it seems it is gearing up for a bigger move now.
The daily chart exhibits a conformation of inverse head and shoulder as well as the cup and handle patterns.
Since the move is backed by sizable volumes, it can be interpreted as a healthy one.
(The author is Chief Technical & Derivatives Analyst at Angel Broking)
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