Rohan Patil
The benchmark index Nifty finally witnessed a breakout of a range on July 1.
For the last four trading sessions, Nifty had been forming a basing pattern near 10,200 level and witnessed strong support.
Market breadth remained in favour of bulls. For every three gainers, there were a couple of losers.
Nifty has formed a rising channel formation while Nifty future has formed a rising wedge pattern on the daily interval.
At present, Nifty is trading in a rising channel pattern and has settled well above its 21 and 50-day exponential moving averages on the daily chart.
The conjunction of moving average and lower band of the rising channel are coinciding at 10,100 -10,000 levels.
Indian bourses are currently capped under the 50week exponential moving average which is placed at 10,600 odd levels.
The break of 10,550 – 10,600 level will open the gate for 11,000 level in the coming trading sessions. In case the index violates 10,000, a sharp decline will take place which could drag the index towards 9,700 – 9,500 levels.
Here are three trading ideas for the next 3-4 weeks:
Infosys | Buy | LTP: Rs 730.85 | Target price: Rs 780 | Stop loss: Rs 700 | Upside: 7%
The stock managed to surpass the multiple resistance zones around Rs 720 – 725 on June 26, which eventually confirmed an ascending triangle breakout.
The recent leg of strong up-move is also supported by strong volumes and also resembles a strong consolidation breakout.
Prices are trading above its all major exponential moving averages (21, 50 and 100) on the daily chart.
Momentum oscillator RSI (14) is reading above 60 levels with positive crossover, which is positive for the index.
The MACD indicator is reading above its line of polarity with positive sentiments. Traders can accumulate the stock in the range of Rs 730 - 734.
On the daily chart, Nippon Life has given a breakout of the “Consolidation Pattern”.
Prices are firmly holding the support near the 21 and 50-days simple moving average which is formed at Rs 290 levels on the daily time frame.
Momentum oscillator RSI (14) is reading above 60 levels with positive crossover, which is positive for the stock.
The MACD indicator is reading above its line of polarity with positive sentiments. The majority of indicators and oscillators are showing a positive trend for the current scenario. Furthermore, prices have sustained above all its major simple moving averages.
Traders can accumulate the stock in a range of Rs 312 -315.
Jubilant Foodworks, on the daily chart, has witnessed an upward rising trend line breakdown and profit-booking at this level cannot be ruled out.
Momentum oscillator RSI (14) seems to have flattened out near 65 -70 level which is an overbought zone.
The price on the weekly chart is capped at 78.60 percent retracement which is placed at Rs 1,785. Traders can short the stock in the range of Rs 1,690-1,705.
(The author is Technical Analyst at Bonanza Portfolio)
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