It is approaching recent low of 10,094 forming a bullish AB=CD pattern. Breakdown from this support may drag the index down to levels of 10,008-9,900 which is 127% & 161.8% Fibonacci retracement levels of the BC leg respectively.
By Aditya Agarwala
The Nifty50 index failed to trade beyond the 78.6% Fibonacci retracement level placed at 10,405 levels leading to a sharp correction along with high volumes.
Further, it is approaching recent low of 10,094 forming a bullish AB=CD pattern. Breakdown from this support may drag the index down to levels of 10,008-9,900 which is 127% & 161.8% Fibonacci retracement levels of the BC leg respectively.
However, a sustained trade above 10094 can trigger short covering rally which could take the index to levels of 10,290-10,350. Moreover, a trade beyond 10,405 will invalidate the bullish AB=CD pattern setup taking it previous highs of 10530.
In the event of a sharp correction to levels of 9900 i.e. potential target of the CD leg, can be used as a buying opportunity for upside targets of 10,405-10,530.
Here is a list of top 3 stocks which could give up to 16% return in 3-4 weeks:
Gujarat Fluorochemicals Ltd: BUY| Target Rs1050| Stop Loss Rs855
Gujarat Fluorochemicals Ltd. (GUJFLUORO) has broken out from its Flag pattern on the weekly chart resuming the bull trend. A sustained move above the neckline i.e. Rs910 on good volumes can take the stock higher to levels of Rs985-1050.
On the daily charts, stock has broken out from its consolidation phase on good volumes affirming the bullishness. The RSI has turned upwards after taking support at the neutral level of 45 and currently it has broken out of a Bollinger Band squeeze on the weekly charts portending to extended bullishness in the stock.
The stock can be bought in the range of Rs905-910 for targets of Rs985-1050, keeping a stop loss below Rs855.
NMDC Ltd: BUY| Target Rs151| Stop Loss Rs126
NMDC Ltd. (NMDC) has broken out from a Symmetrical Triangle pattern neckline line suggesting bullishness building up in the stock. Further, a sustained trade above 133 on good volumes can take it to levels of 142-151 in the coming trading sessions.
The relative strength index or RSI on the weekly chart has taken support at the 45 level and currently broken out from a Bollinger Band squeeze suggesting higher levels.
On the daily chart, it has broken out of an Ascending Triangle pattern on good volumes affirming the bullishness. The stock can be bought in the range of 132-134 for targets of 142-151, keeping a stop loss below 126.
Balrampur Chini Mills Ltd. (FUT): SELL| Target Rs136| Stop Loss Rs162
On the weekly chart, Balrampur Chini Mills Ltd. (BALRAMCHIN) is on the verge of a break down from a rising Channel pattern neckline placed at 150; breakdown can trigger a bear trend reversal dragging it to levels of 142-136.
On the daily chart, it has broken down from a Triangle pattern affirming bearishness building up in the stock. The stock can be sold in the range of 155-153 for targets of 142-136, keeping a stop loss below 162.Disclaimer: The author is Technical Analyst, YES Securities (I) Ltd. 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.