Nifty witnessed a rising channel pattern breakdown on the daily chart. It seems to have completed its throwback and is now trading below its trendline resistance.
The benchmark index on March 31 made a gap down opening tracking weakness in the global markets and closed one percent lower.
The index, on the weekly chart, is locked within a rising channel pattern and is currently trading near the lower band of the rising channel pattern which will act as an important support zone in the weekly interval.
For the last couple of trading sessions, the index has been trading within the 21 & 50-day EMA band and the momentum oscillator RSI (14) is indicating a negative slope.
This technical setup indicates a mixed bias which can lead to a rangebound movement with a spike in volatility.
India VIX seems to have flattened out in the range between 19 and 22 and is currently not producing any significant clues.
The breakdown below 18 level will cool off volatility but the breakout above 23 level will shoot up volatility.
Bank Nifty seems to have completed its throwback of a breakout which was witnessed in the first week of February.
The banking index, on the weekly chart, has completed its 61.80 percent Fibonacci retracement, which is placed at 32,751.
We expect Nifty to remain volatile for the next coming trading sessions with a sideways to a bearish trading pattern. Support for the Nifty is placed near 14,400 and resistance is near 14,950.
Here are two buy and one sell calls for the next 2-3 weeks:
ICICI Prudential Life Insurance Company | Buy | LTP: Rs 445.60 | Target price: Rs 478 | Stop loss: Rs 428 |Upside: 7%
On the Daily chart, the stock has completed a bullish bat harmonic pattern.
The stock is trading above its 100 and 200-day exponential moving average on the weekly timeframe.
RSI (14) has witnessed a sharp reversal from the oversold level and is currently reading above 40-level on the daily interval.
This counter has taken support at 38.20 percent Fibonacci retracement from its previous year's March low on the weekly timeframe.
HPCL | Buy | LTP: Rs 234.50 | Target price: Rs 255 | Stop loss: Rs 224 | Upside: 9%
After a prolonged consolidation, this stock has witnessed a rectangle pattern breakout on the weekly timeframe. It has completed its throwback and is trading near its trendline support.
When we observe volume activity, there has been an above-average volume setup for the past few days.
Momentum oscillator, RSI (14) is tangled in a bullish range shift of 50 – 70 levels.
MACD is reading above its line of polarity which indicates bullish momentum is likely to continue after a minor pullback.
The recent minor retracement has found support near the 50-week exponential moving average and currently, the stock is trading above the same.
Kotak Mahindra Bank | Sell | LTP: Rs 1,753 | Target price: Rs 1,665 | Stop loss: Rs 1,803 | Downside: 5%
This stock, on the daily chart, has witnessed a descending triangle pattern breakdown and is trading below its trendline resistance.
It is trading below its 21, 50 & 100- day exponential moving averages on the daily timeframe, which is negative for the stock in the near term.
Momentum oscillator, RSI (14) has given a horizontal trendline breakout which was placed at 45 level. Currently, RSI is reading below 40 level with a bearish crossover.
(The author is a technical analyst at Bonanza Portfolio)Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.