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Last Updated : Sep 16, 2019 01:37 PM IST | Source: Moneycontrol.com

'Nifty may test 200 DEMA at 11,215 in current pullback; 4 stocks than can return 4-8%'

The chart pattern suggests that if Nifty crosses and sustains above 11,100 levels it would witness buying which would lead the index towards 11,170-11,300 levels.

Moneycontrol Contributor @moneycontrolcom
 
 
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Nifty started the week gone by on a flat note but continued its previous week's positive momentum to end the week on a strong note. Nifty closed at 11,076 with a gain of 130 points on a weekly basis.

On the weekly chart index has formed a sizable bullish candle forming higher High-Low formation indicating positive bias. Since past 5-6 weeks index is consolidating within broad range of 11,150-10,750 levels representing short term sideways trend.

Hence any either side breakout will indicate further direction. The chart pattern suggests that if Nifty crosses and sustains above 11,100 levels it would witness buying which would lead the index towards 11,170-11,300 levels. However if index breaks below 10,950 level it would witness selling which would take the index towards 10,880-10,800.

Close
Tracking the derivatives data, open interest in Nifty 11,100-11,200 CE is highest among all options which implies going forward 11,200-11,250 levels may act as a resistance zone and fresh supply zone on the upside.

Open interest in Nifty 11,000 PE is highest among all options implies 10,950-10,900 as an important support zone.

Nifty is now well placed above its 20-day SMA indicating positive 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 11,300-11,000 with a positive bias.

The weekly strength indicator RSI and momentum oscillator Stochastic have both turned positive and are above their respective reference lines indicating positive bias

Bank Nifty

Bank Nifty started the week on a flat note but continued its previous week's positive momentum to end the week on a strong note. Bank Nifty closed at 28,099 with a gain of 851 points on a weekly basis.

On the weekly chart the index has formed a long bullish candle forming higher high-low compare to previous week and has closed above previous week's high indicating positive bias. Since the last 5-6 weeks, index has been consolidating within broad range of 28,500-26,600 levels representing sideways trend, hence any either side decisive breakout will indicate further strength.

The chart pattern suggests that if Bank Nifty crosses and sustains above 28,150 levels it would witness buying which would lead the index towards 28,450-28,800 levels. However if index breaks below 27,570 level it would witness selling which would take the index towards 27,300-27,180.

Bank Nifty is now well placed above its 20 SMA indicating positive bias in the short term. Bank Nifty continues to remain in a downtrend in the short to medium term, so selling on rallies continues to be our preferred strategy. For the week, we expect Bank Nifty to trade in the range of 28,900-27,500 with a positive bias.

The weekly strength indicator RSI and momentum oscillator Stochastic have both turned positive and are above their respective reference lines indicating positive bias.

Here is the list of stocks which could return 4-8 percent in near term:

Vedanta: Buying Range Rs 149-145 | Stoploss: Rs  138 | Target: Rs 155-159 | Return: 5-8 percent

On the weekly chart stock price has decisively broken out from its 'consolidation range' of Rs 147-135 levels on closing basis and sustaining above the same. This breakout has accompanied with increase in volumes which supports bullish sentiments ahead.

The daily as well as weekly strength indicator RSI and the momentum indicator Stochastic both are in positive territory which supports upside momentum to continue in near term. Stock price is sustaining well above its 20-day SMA which supports bullish sentiments ahead.

Ceat: Buying Range Rs 923-913 | Stoploss: Rs 892 | Target: Rs 953-970 | Return: 4-6 percent

On the daily chart stock price has decisively broken out from its 'consolidation range' of Rs 920-880 levels on closing basis and sustaining above the same. This breakout has accompanied with increase in volumes which supports bullish sentiments ahead. The

daily as well as weekly strength indicator RSI and the momentum indicator Stochastic both are in positive territory which supports upside momentum to continue in near term. Stock price is sustaining well above its 20 and 50 day SMA which supports bullish sentiments ahead.

Titan Company: Buying Range Rs 1,124-1,100 | Stoploss: Rs 1,080 | Target: Rs 1,156-1,180 | Return: 4-6 percent

On the daily chart stock price has decisively broken out from its 'Multiple resistance zone' levels of Rs 1,115-1,110 levels on closing basis and sustaining above the same. This breakout has accompanied with increase in volumes which supports bullish sentiments ahead.

The daily as well as weekly strength indicator RSI and the momentum indicator Stochastic both are in positive territory which supports upside momentum to continue in near term. Stock price is sustaining well above its 20, and 50 day SMA which supports bullish sentiments ahead.

Escorts: Buying Range Rs 535-525 | Stoploss: Rs 500 | Target: Rs 558-573 | Return: 5-8 percent

On the weekly chart stock price has decisively broken out from its 'Downsloping Channel' on closing basis and sustaining above the same. This breakout has accompanied with increase in volumes which supports bullish sentiments ahead.

The daily strength indicator RSI and the momentum indicator Stochastic both are in positive territory which supports upside momentum to continue in near term. Stock price is sustaining well above its 20 and 50 day SMA which supports bullish sentiments ahead.

(The author is DGM - Research ( Head Technical & Derivatives Research) at Axis Securities.)

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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First Published on Sep 16, 2019 01:37 pm
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