It was truncated, but the week ended January 27 has been one of a rough ride for the bulls on Dalal Street. The Nifty remained in the red for the past three consecutive trading sessions and Friday came like a doomsday with the index breaking the supports at 17,775 - 17,750 and, eventually, closing with a loss of over 2 percent near 17,600.
We observed a trend move on the downside during the week. The upside resistance was at 18,200 and the index turned precisely from there and now we have a confirmed breakdown below 17,775. The breakdown has a shape that resembles a bearish flag pattern and if this works then we might see the targets of 17,200 – 17,000 in the coming few weeks. The pattern will get negated only above 18,200. The view is clear that till the time 18,200 is not taken out, we are in a sell-on-rise mode.
The Nifty Bank index took most of the beating since the index was down by more than 5 percent during the week and almost retested the 40,000 mark. Previously we had a view that below 41,500 the index can go down towards 40,000 but that might act as psychological support. A similar kind of movement was witnessed since the support of 40,000 is still not broken.
Going ahead a breach of the same might intensify the selling pressure that the index might be heading toward 38,000 mark. On the upside; resistance is placed at 41,500 for the time being.
Here two buy calls and one sell call for short term:
Emami: Buy | LTP: Rs 439 | Stop-Loss: Rs 409 | Target: Rs 480 | Return: 9 percent
In spite of the fact that the said counter has witnessed massive beating after making the high of Rs 524 on September 26, 2022 which resulted in a 22 percent cut in stock price. Since last month the said counter looks like it has stabilized around Rs 410-415 zone.
Following are some important points that are making Emami as a buy candidate:
Bullish Bat was seen on a daily scale with a potential reversal zone of Rs 415-425. Furthermore, bullish divergence was seen on the daily scale of RSI (relative strength index) and MACD (moving average convergence divergence). In addition to bullish divergence, trendline violation was seen on RSI. (refer to the chart).
Selling volume has dried up from the recent fall from Rs 480 to 410 thus indicating a possible turnaround. In the previous trading session, the counter witnessed decent buying of 4.5 percent supported by good volume at lower levels.
Looks like the price structure has changed since Emami has vouched for by breaking its previous swing high of Rs 438 and successfully closing near Rs 440 mark.
One can buy in the range of Rs 436-442 in a small tranche and another around Rs 420-425 (if tested again). Target is expected at Rs 480 with a stop-loss of Rs 409 on a daily closing basis.
PVR: Buy | LTP: Rs 1,740 | Stop-Loss: Rs 1,649 | Target: Rs 1,825 | Return: 5 percent
At the current juncture, PVR is trying to stabilize near the 0.618 retracements of its previous rally which was started from December 2021 till August 2022.
Following are some important pointers that are making PVR a buy candidate:
Bullish AB=CD was seen on a daily scale with a potential reversal zone of Rs 1,620-1,650. Furthermore, bullish divergence was seen on the daily scale of RSI and MACD histogram. In addition to bullish divergence, trendline violation is seen on RSI. (refer to the chart).
Also, Triple bottom formation was seen on 0.618 retracement which makes PVR more lucrative at current levels.
Looks like the price structure has changed since PVR has vouched for by breaking its previous resistance of Rs 1,700 and successfully closing near Rs 1,740 mark.
One can buy in the range of Rs 1,725-1,740 in a small tranche and another around Rs 1,680-1,700 (if tested again). Target is expected at Rs 1,825 with a stop-loss of Rs 1,649 on a daily closing basis.
Max Financial Services: Sell | LTP: Rs 838 | Target: Rs 770 | Return: 8 percent
Though MFSL might look lucrative after a 33 percent up move in the current month whereas broader market almost remained negative. But one needs to be cautious and look at the bigger picture. The following pointers will throw some light on the same.
On a daily scale, MFSL is in a clear downtrend., it has been making lower highs and lower lows structure for the last 16 months.
Since two trading sessions, MFSL has made a Shooting Star followed by a Bearish Engulfing pattern exactly near its historical trendline which is 16-18 months old. (refer to the chart).
Hidden bearish divergence was seen on the daily 14-period RSI, where price action is not able to clear out its previous historical highs but RSI is making higher highs in the extreme zone.
One can book profits immediately. Fresh buy is not recommended at current levels. As we are expecting decent correction till Rs 760-770.
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