Himanshu Gupta
After witnessing a strong opening, the market failed to hold on to the gains but still managed to defend the previous day’s lows on July 15.
Now, 10,820-10,830 is likely to remain a crucial resistance in the near term for Nifty, given the crucial Fibonacci ratio resistance from the highs of 10,894 and 10,550 which is the recent high and low.
Nifty failed to conquer the upward sloping short-term uptrend below which it broke on July 14th and as expected it acted as a stiff resistance.
Having said that, since the benchmark is still managing to hold above its 200-day EMA which is at 10,531, and as the price pattern also offers multiple supports around 10,500-10,550, we can still expect a buying interest at the lower end of the range.
Meanwhile, the global mood also looks supportive, therefore, we would recommend a 'buy' on Nifty at 10,550 for the target of 10,750 and stop loss below 10,480 for July 16.
The Nifty bank looks oversold in the short term and after witnessing a selling pressure over the last few sessions, the index is holding on to its 50-day EMA support around 20,200 levels.
We have also observed some positive divergences in the short-term charts on the leading indicators of Bank Nifty.
We would recommend a 'buy' on Bank Nifty at 20,200 for the target of 20,700 and stop loss below 19,950 for July 16.
Here are three buy calls for July 16:
The stock closed above the strong supply zone of Rs 1,830-1,850 with strong volumes.
Also, huge OI addition was seen building in. The stock has also given a breakout from an inverted head and shoulder pattern on the daily charts recently and the price pattern looks poised to take the stock further higher in the near-term.
Bajaj Auto | Buy | LTP: Rs 2,940 | Target price: Rs 3,020 | Stop loss: Rs 2,900 | Upside: 3%
The stock is on the verge of a consolidation breakout. It has been consolidating above the crucial moving averages over the last few days and recently the stock has started to form higher high – higher low formation on the short term charts.
We expect the stock to give a breakout above Rs 2,975 and the rally above Rs 3,000 in the near-term.
Berger Paints | Buy | LTP: Rs 511.50 | Target price: Rs 530 | Stop loss: Rs 504 | Upside: 4%
The stock is forming a potential double bottom on the daily charts after consolidating around Rs 500 over the last few days.
The counter has also witnessed a buy crossover in the momentum indicators and the volume, OI activity have also been improving.
(The author is Vice President – Research at Globe Capital Market)
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