Nifty started the week with a downward gap and traded with negative bias throughout the week. The index closed at 11,553 with a loss of 259 points on a weekly basis.
On the weekly chart, Nifty has formed a sizable bearish candle and formed lower High-Low compared to the previous week. It has also decisively broken it past seven weeks consolidation (12,100-11,600) on closing basis which signals weakness on short and medium-term chart.
On the weekly chart, the index has formed a bearish gap in the range of 11,798-11,772 that remains a crucial resistance zone in the near term. The index is moving in a Lower Top and Lower Bottom formation on the daily chart indicating negative bias.
The chart pattern suggests that if Nifty crosses and sustains above 11,650, it would witness buying that can lead the index towards 11,770-11,860. However, if the index breaks below 11,500 it would witness selling that would take the index towards 11,400-11,280. Nifty is trading below 20 and 50-day SMAs, indicating negative bias in the short term. Nifty continues to remain in an uptrend in the medium term, so buying on dips continues to be our preferred strategy.
For the week, we expect Nifty to trade in the range of 11,700-11,280 with a negative bias.
The weekly strength indicator RSI and momentum oscillator Stochastic have both turned negative and are below their respective reference lines indicating negative bias.
The trend deciding level for the day is 11,575. If Nifty trades above this level then we may witness a further rally up to 11,615-11,680-11715. However, if Nifty trades below 11,575 then we may see some profit booking initiating in the market, which may correct up to 11,515-11,475-11,415.
Bank Nifty Outlook
Bank Nifty started the week with a downward gap and traded with negative bias throughout the week. Bank Nifty closed at 30,601 with a loss of 874 points on a weekly basis.
On the weekly chart, the index has formed a sizable bearish candle forming lower high-low formation and has closed below the previous week's low indicating weakness. However, for past 6-8 weeks, the index has continued to consolidate within 31,800-30,100 representing sideways trend hence any decisive break down below 30,100 will extend further weakness.
The chart pattern suggests that if Bank Nifty crosses and sustains above 30,880 it would witness buying that would lead the index towards 31,100-31,380. However, if the index breaks below 30,400, it would witness selling that would take the index towards 30,200-29,750.
Bank Nifty is trading below 20-day SMA, indicating negative bias in the short to medium term. Bank Nifty continues to remain in an uptrend in the medium term, so buying on dips continues to be our preferred strategy. For the week, we expect Bank Nifty to trade in the range of 30,880-29,700 with a negative bias.
The weekly strength indicator RSI and momentum oscillator Stochastic have both turned negative and are below their respective reference lines indicating negative bias.
The trend deciding level for the day is 38,815. If Bank Nifty trades above this level then we may witness a further rally up to 38,945-39,150-39,280 levels. However, if Bank Nifty trades below 38,815, then we may see some profit booking initiating in the market, which may correct up to 38,605-38,475-38,270.
Here are four stocks that could return 4-9 percent in near term:
Balrampur Chini | CMP: Rs 163.75 | Buying Range: Rs 160-156 | Stop Loss: Rs 148 | Target: Rs 169-173 | Return: 7-9 percent
On the daily chart, the stock price has decisively broken out from its multiple resistance zone levels of Rs 160-158 on a closing basis and is sustaining above the same. This breakout is accompanied by an increase in volumes that supports bullish sentiments ahead.
RSI and Stochastic have turned positive that supports upside momentum. The stock price is sustaining well above its 20 and 50-day SMAs, which supports bullish sentiments ahead.
Apollo Hospitals Enterprises | CMP: Rs 1,366 | Buying Range: Rs 1,350-1,335 | Stop Loss: Rs 1,297 | Target: Rs 1,400-1,422 | Return: 4-6 percent
On the daily chart, the stock price has turned around after taking support at its 38.20 percent Fibonacci retracement levels of its previous rally (Rs 1,112 to Rs 1,406) on closing basis and sustaining above the same. This turnaround is accompanied by an increase in volumes that supports bullish sentiments ahead.
RSI and Stochastic have turned positive that supports upside momentum. The stock price is sustaining well above its 20, 50 and 100-day SMAs, which supports bullish sentiments ahead.
United Spirits | CMP: Rs 585.50 | Buying Range: Rs 580-570 | Stop Loss: Rs 558 | Target: Rs 602-619 | Return: 5-8 percent
On the daily chart, the stock price has decisively broken out from its 'downsloping trendline' of Rs 580-575 on closing basis and is sustaining above the same. This breakout is accompanied by an increase in volumes that supports bullish sentiments ahead.
RSI and Stochastic have turned positive that supports upside momentum. The stock price is sustaining well above its 20, 50 and 100-day SMAs, which supports bullish sentiments ahead.
SRF (July Fut) | CMP: Rs 2,750.65 | Selling Range: Fut Rs 2,820-2,840 | Stop Loss: Rs 2,910 | Target: Rs 2,700-2,640 | Return: 5-7 percent
On the weekly chart stock price has decisively broken down from its multiple support zone of Rs 2,820-2,800 on closing basis and is sustaining below the same. This breakdown is accompanied by an increase in volumes that supports bearish sentiments ahead.
RSI and Stochastic have turned negative that supports downside momentum. The stock price is sustaining well below its 20, 50-day SMAs, which supports bearish sentiments ahead.
The author is DGM - Research ( Head Technical & Derivatives Research) at Axis Securities Limited.
Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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