Gaurav Bissa
Nifty infra index has been trading in a range since the past few months and witnessed wild swings during June. However, the index is now out of its consolidation phase and has given multiple breakouts on weekly charts.
The index has witnessed a double bottom breakout above 3,325 that if held can lead to strong upside in coming weeks.
The index has also given breakout from bullish flag pattern on weekly charts which implies the uptrend that it had captured earlier is likely to continue.
Based on the patterns discussed earlier, the index can touch 3,525, which if held can lead to a further rise till 3,725, keep a stop-loss below 3,250.
Sectors tend to remain strong if the heavy components witness strong uptrend. In this case, L&T has been witnessing strong up move. The stock gave a consolidation breakout above Rs 1,450 and since then it has been holding the breakout levels.
The stock is now forming bullish pennant formation on weekly charts with a breakout at higher levels. This implies once a breakout is confirmed the index will also witness a push.
Siemens is another crucial component to witness multiple breakouts on the weekly charts. The stock has witnessed a rounding bottom breakout along with bullish flag breakout on daily and weekly charts.
RSI has also given a small breakout which implies the stock can continue to witness some upside and it can scale towards Rs 1,400.
Power Grid is one of the slowest moving components of Nifty Infra index. However, after a very strong consolidation, the stock has given a strong breakout on weekly charts.
The stock witnessed triple bottom breakout with incremental volumes along with falling trendline breakout. The stock is trading above all major moving averages along with a breakout in RSI implying the trend is likely to remain strong. The stock can test Rs 220-230 in coming days.
The author is AVP Derivatives and Technicals at LKP Securities.
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