Bank Nifty is looking much stronger than Nifty and we can expect it to test 25,000-25,250 levels in the coming sessions.
The Indian market witnessed highly volatile moves on October 27 with Nifty seen trading in the broader range of 11,700-11,950.
Volatility is likely to grip the market in the coming sessions as well as we are approach the October F&O series expiry.
On the derivative front, the 12,000 call strike still holds maximum open interest which should act as strong resistance for Nifty.
On the downside, 11,700 would be immediate strong support. A decisive move beyond this range on any side will set the further direction for Nifty.
Bias is likely to remain in favour of bulls. On the technical front, Bank Nifty is looking much stronger than Nifty and we can expect it to test 25,000 to 25,250 levels in the coming sessions.
Here are three buy calls for the next 3-4 weeks:
For the last more than nine weeks, the stock has been consolidating in the range of Rs 1,950-2,220 levels along with consistent buying around support levels.
On the daily charts, prices are still holding well above the short and long-term moving averages.
This week, the stock has given a breakout above the key resistance level of Rs 2,150 after a prolonged consolidation.
Additionally, the stock has also formed a rectangle pattern on the daily interval which suggests further upside in the prices.
In late September, the stock slid sharply towards Rs 560, and thereafter it gave an almost V-shape recovery to once again be back above its 100-days exponential moving average on the daily charts.
At the current juncture, the stock has made an inverted head and shoulder pattern on the daily charts and also managed to give breakout above the neckline of the pattern formation.
The positive divergences on secondary oscillators also suggest the next upswing in the prices as the stock is on the verge of a breakout above its 200-days exponential moving average.
The stock can be seen trading in a rising channel on daily and weekly charts with prices holding well above its short-term moving averages.
This week, the stock has managed to give breakout above the consolidation range of Rs 2,050 to Rs 2,250 and made a new 52 week high of Rs 2,441.45 in Tuesday’s session.
The price volumes action suggests a long build-up in the prices that points towards the next upside in the coming sessions.
(The author is a senior technical analyst at SMC Global Securities)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.