Moneycontrol PRO

Hot Stocks | Market breadth turning in favour of bears; Bata India, Escorts top buy ideas

The immediate support for the Nifty is placed near 16,400 levels and the resistance is pegged near 16,700–16,750 levels

August 20, 2021 / 07:20 AM IST
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

The Nifty5 on August 18 saw a 50 point gap-up opening and hit a new high of 16701.85 in the initial hour of trade but erased all the gains to turn negative in the late afternoon session.

The Nifty formed a bearish cloud cover candlestick on the daily interval at all-time high levels. In the bearish cloud cover pattern, prices generally open in the positive terrain but then fail to sustain and fall from the day’s high levels and retrace more than 70 percent to the previous day's green candle.

The market breadth has been turning in favour of the bears for the last few sessions and there is no aggressive participation from foreign institutional investors (FII) and domestic institutional investors (DII).

On the daily chart, the momentum oscillator RSI (14) is close to its overbought zone and is at 73.89 levels.

The distance between the price and the 21-day exponential moving average is expanding significantly, indicating that prices can retrace their previous support levels.

Close

The immediate support for the Nifty is placed near 16400 levels and the resistance is pegged near 16700 – 16750 levels.

The Bank Nifty continues to underperform the benchmark index and face a strong resistance of a horizontal trend line near 36200 levels.

Momentum Oscillator RSI (14) has turned down from 60 levels and indicates a weak momentum. The major breakout in the banking index will come only above 36300 levels. The next intermediate support is placed at the 35000 mark near its 50-DMA.

Here is a list of trading ideas for the next 3-4 weeks:

Bata India: Buy| LTP: Rs. 1759| Target: Rs 1885|Stop Loss: Rs 1688|Upside 7%

The prices were trading in an ascending triangle formation for the past six months and have formed a trend line resistance at 1690 levels.

Bata India has broken out of an ascending triangle pattern at 1693 levels on 10th Aug and the prices have registered a decisive breakout that suggests a change in the trend from sideways to upside.

The stock is trading above its 21, 50 & 100- day exponential moving averages on the daily time frame, which is positive for the prices in the near term.

MACD indicator is reading above its centerline with a positive crossover above its signal line.  Momentum oscillator RSI (14) is reading near 60 levels which indicates positive momentum will like to continue ahead.

Escorts: Buy| LTP: Rs 1229| Target: Rs 1305 |Stop Loss: Rs. 1190|Upside 6%

Escorts were trading in a narrow range of 1140 – 1240 from the last four months and has formed a rectangle pattern on the daily time frame. On the 10th Aug prices have witnessed a breakout of a rectangle pattern at 1270 levels.

The stock is trading above its 21, 50 & 100- day exponential moving averages on a daily time frame, which is positive for the prices in the near term.

When we observe volume activity there has been above-average volume set up from the past couple of weeks on the daily chart, which indicates accumulation phrase.

Momentum oscillator RSI (14) is reading above 60 levels with positive crossover on the weekly scale.

RIL: BUY| LTP: Rs 2171| Target: Rs 2285|Stop Loss: Rs 2100|Upside 5%

Reliance Industries on the daily chart was trading in a narrow range between 2150 – 2100 levels for more than seven weeks and has formed an inverted head & shoulder pattern.

Prices on the 16th of Aug witnessed a sharp breakout above its neckline resistance with above-average volume and have retested its neckline support post breakout on the daily time frame.

It has formed a rounding bottom pattern on the weekly chart and prices are also trading above its 21 & 50-day exponential moving averages on the daily interval. Indicators and oscillators are reading in positive terrain with bullish crossovers.

The immediate support for the Nifty is placed near 16,400 and resistance at 16,700–16,750.

The Bank Nifty continues to underperform the benchmark index and faces a strong resistance of a horizontal trend line near 36,200.

The momentum oscillator RSI (14) has turned down from 60 levels, indicating a weak momentum. A major breakout in the banking index will come only above 36,300. The next intermediate support is placed at the 35,000-mark near its 50-DMA.

Here is a list of trading ideas for the next three-four weeks:

Bata India: Buy| LTP: Rs 1,759| Target: Rs 1,885|Stop Loss: Rs 1,688|Upside 7%

Prices were trading in an ascending triangle formation for the past six months and have formed a trend line resistance at 1,690 levels.

Bata India broke out of an ascending triangle pattern at 1,693 on August 10 and the price registered a decisive breakout that suggests a change in the trend from sideways to upside.

The stock is trading above its 21, 50 & 100-day exponential moving averages (DEMA) on the daily time frame, which is positive for the prices in the near term.

MACD indicator is reading above its centre line with a positive crossover above its signal line. RSI (14) is near 60 level, which indicates that positive momentum will continue.

Escorts: Buy| LTP: Rs 1,229| Target: Rs 1,305 |Stop Loss: Rs 1,190|Upside 6%

Escorts is trading in a narrow range of 1,140–1,240 for the last four months and has formed a rectangle pattern on the daily time frame. On August 10, prices witnessed a breakout of a rectangle pattern at 1,270 levels.

The stock is trading above its 21, 50 & 100 DEMA on the daily timeframe, a positive for the prices in the near term.

When we observe volume activity, there has been above-average volume set up for the past couple of weeks on the daily chart, which indicates an accumulation phase.

RSI (14) is reading above 60, with a positive crossover on the weekly scale.

RIL: BUY| LTP: Rs 2,171| Target: Rs 2,285|Stop Loss: Rs 2,100|Upside 5%

On the daily chart, Reliance Industries is trading in a narrow range between 2,150 and 2,100 for more than seven weeks and has formed an inverted head & shoulder pattern.

On August 16, it witnessed a sharp breakout above its neckline resistance with above-average volume and retested its neckline support after the breakout on the daily timeframe.

It has formed a rounding bottom pattern on the weekly chart and prices are also trading above its 21 & 50-DEMA on the daily interval. Indicators and oscillators are reading in positive terrain with bullish crossovers.

(The author is Technical Analyst At Bonanza Portfolio Ltd)

Disclosure: MoneyControl is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

 
Rohan Patil

stay updated

Get Daily News on your Browser
Sections
ISO 27001 - BSI Assurance Mark