Jaydeb Dey
The Nifty ended Tuesday 0.04% lower at 10,801.85. It remained extremely volatile throughout the session before ending with a bearish Shooting Star candle. Erasing of early gains implies that traders and investors have turned extremely cautious after the absence of a clear majority in the Karnataka assembly elections.
The index reacted down from the day’s high of 10,929 before finishing off nearer to its critical support around 10,780 levels. As the broader pattern suggests, the uptrend is well intact as long as it trades above 10,750 levels. Below 10,750, its next support is placed around 10,700 levels.
On the Nifty hourly chart, its failure to hold early morning positive momentum led to an intraday correction towards 10,780 levels. However, its critical support around 10,750 levels is still intact.
Nifty patterns on multiple timeframes show it ended the day on a subdued note. Failing to hold early morning gains implies it might go into corrective mode. Downside supports are placed around 10,750 and 10,700.
The Bank Nifty ended Tuesday flat at 26,474. It ended the session with a bearish Shooting Star candle. Critical support is placed around 26,390 levels with upside resistance around 26,600 levels.
Based on a thorough technical study, we recommend Tech Mahindra for the short-term:
Tech Mahindra | Rating: Buy | Target: Rs 695, stop loss: Rs 650, Return: 4 percent
The stock maintained itself above the critical level of RS 665 and currently trading well above the 30 EMA on the daily chart.
Based on above mentioned observations, we recommend Tech Mahindra as a buy on dips for the short-term upside target of Rs 695.
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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