The immediate requisite for unlocking the directional momentum play would be a definitive close above 11,950-12,065 zone.
Volatility will keep the Nifty oscillating as the range for the week starts contracting to 11,950-11,700 from 12,065-11,580. The 'Inside Bar' formation reconfirms the squeeze. The immediate requisite for unlocking the directional momentum play would be a definite close above 11,950-12,065. Until then, we expect the index to retain its oscillation mode within 11,700-11,950 zone.
The leadership remains with the banks as the Bank Nifty is on the verge of breaking above its latest four-day swing high placed at around 24,830. Trend strength indicators are still positive and complement the positive bias but it will be ideal to retain a mean reversion strategy while the index does not register a confident close above the broad-band of 12,065-11,580. A breakout in the coming session will push the Bank Nifty towards 25,500 along with the Nifty towards 12,140.
Here are three stock recommendations for the short term:
Buy ICICI Bank
Positive sector outlook and occurrence of a 'Bulliish Hammer' reconfirms support around Rs 400. The stock had also witnessed a breakout from a 'V' shaped pattern on its weekly scale, with its weekly RSI trending comfortably above the 50-mark.
Along with its peers the stock saw significant jump in delivery volumes in the week gone by. On the other hand, option writers around 400 CE strike seemed to have been pushed farther away as the bound shifted higher to Rs 420 while fresh additions at 400 PE strike reaffirm the shift in support. Though the weekly scale pattern indicates a price target of up to Rs 485, momentum is expected to amplify once again above Rs 420, which could be participated with building fresh longs for the next few weeks with a stop below Rs 402 for an initial up move towards Rs 445.
After seven weeks of underperformance, the stock has witnessed first signs of a reversal in its immediate trend. The occurrence of a 'Homing Pigeon' formation on its daily scale needs an affirmative close above Rs 2,050.
The volume pickup has been strong for the last two days as the stock is about to complete its Zig Zag corrective wave on the daily scale. A breakout above Rs 2,050 would re-establish another impulse wave, which could would help the stock rescale above its life high of around Rs 2,370. Trading longs to be considered with a stop below Rs 1,980 from hereon.
Fresh breakout from a Flag formation on its weekly and daily scale indicates that the up move will continue. The breakout was well supported with significant volumes, which were up by nearly three times above its five-week average volumes. Momentum is expected to stretch towards the pattern target of up to Rs 2,340, which could be participated with a stop below Rs 1,820.
(Sacchitanand Uttekar – DVP – Technical (Equity), Tradebulls Securities.)
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