Aditya Agarwala
Nifty resumed its corrective wave following four days of pullback rally within a gigantic downtrend. Further, it is on the verge of a breakdown from a trend line support which could trigger expanded corrections suggesting that the bears are still controlling the market.
Moreover, a sustained trade below 8,260 could drag the index lower to levels of 8,080 and 7,800. On the flip side, a trade beyond 8,450 can activate short-covering rallies taking Nifty higher to levels of 8,740 and 8,960.
However, ADX indicator has risen above the Negative DI indicator which suggests that the selling has reached extreme oversold zone and VIX has also been cooling off from the peak of 86.64 indicating that wild volatile swings may halt.
On the daily chart, ICICI Bank has broken down from a bearish flag pattern resuming its downward journey. Further, a sustained trade below Rs 313 may drag it lower to levels of Rs 280-265. Further, on the weekly chart, it is facing stiff resistance at the 200-WMA (weekly moving average) and has also broken down from trendline support confirming weakness.
Technical indicators are also favoring the bears. The stock may be sold in the range of Rs 317-314 for targets of Rs 280-265, keeping a stop loss above Rs 345.
On the weekly chart, Titan Company has turned upwards after taking support at the previous swing low of Rs 732 which also happened to be the GAP support area formed in 2017 which is yet to be filled. Further, on the daily chart, it is trading back above its short term moving average i.e. 5-DMA after March 6, 2020 indicating intermediate bullishness. Moreover, it has also taken support at the 23.6 percent Fibonacci retracement level suggesting bullishness.
RSI has turned northward from the support zone of 30 which is favoring the bulls. The stock may be bought in the range of Rs 944-950 for targets of Rs 1050-1100, keeping a stop loss below Rs 880.
On the weekly chart, Tech Mahindra has turned northwards after taking support at a major upward sloping trendline. Further, it also took support at the 78.6 percent Fibonacci retracement level of the previous up move suggesting that bulls are supporting at the support zone.
On the daily chart, it has formed a bullish Engulfing pattern after a sustained downtrend and is also trading back above its 5-DMA. Further, RSI has formed a positive divergence which favors the bullish view developing currently. The stock may be bought in the range of Rs 526-529 for targets of Rs 565-590, keeping a stop loss below Rs 500.
The author is Senior Technical Analyst - Institutional Equities at YES Securities
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