Jaydeb Dey
The Nifty ended Thursday 0.78 percent higher at 10,768.35. It opened on a stronger note and touched a high of 10,818. Continuous rise, followed by profit booking in the last hour of trade led the benchmark index to close with an inverted Hammer candle.
This chart pattern suggests that the momentum is likely to continue as long as it trades above 10,630. Hence, a buy-on-dips is advised. Midway support on the Nifty is placed around 10,700 levels. On the upside, major resistances are placed around 10,780 and 10,820 levels.
On the Nifty hourly chart, a sharp gap-up opening backed by follow through buying led the benchmark index over the 10,800 mark. However, profit-booking at the end of the session led to a timid closing. 10,700 may now act as the immediate critical support.
Nifty patterns on multiple timeframes show it ended the day with an Inverted Hammer Candle. This chart pattern suggest that immediate supports are placed around 10,700 and 10,630 levels.
The Bank Nifty on Thursday ended 0.57 percent higher at 26,517.80. Failing to hold early morning gains led it to end the session with a bearish Shooting Star candle. Downside pivotal support for the index is placed around 26,100, with 26,600 continuing to act as critical resistance.
Based on a thorough technical study, the research firm recommends Canara Bank for the near term:
Canara Bank | Rating: Buy | Target: Rs 290, stop loss: Rs 260, Return: 7%
After a prolonged consolidation the stock ended the session with an Inverse Head and Shoulder pattern breakout. Neck line support is placed around Rs 266 levels.
Based on above mentioned observations, the house recommends Canara Bank as a buy on dips for the short term upside target of Rs 290.
Disclaimer: The author is Technical Analyst at Stewart & Mackertich Wealth Management Ltd. The views and ideas expressed above may have been suggested to the clients of Stewart & Mackertich Wealth Management Ltd. It is advised that investors/traders should consult with their Certified Experts before taking any investment decision.
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