Jaydeb Dey
The Nifty ended Friday 0.75 percent higher at 10,821.85. It opened the session weak but found strong support at 10,700 levels. It recovery from the day’s low of 10,710.45 before ending the session nearer to its high, forming a bullish body candle.
On the weekly chart, the Nifty ended nearly flat before finishing off with a Dragonfly Doji candle, which implies buying interest on dips around its critical support of 10,700 levels. The bullish body candle in the last session of the week is manifestation of the benchmark index regaining strength. On the upside, major resistance is placed around 10,860 levels. Breaking above 10,860 may extend this leg of the upmove to 10,950 levels.
On the Nifty hourly chart, the index rose from its 200-day exponential moving average placed around 10,710 levels and ended with a downward trending channel breakout. Aggressive buying in the last hour of trade suggests, this upmove is likely to sustain and may challenge its higher resistance placed around 10,860 levels.
Nifty patterns on multiple timeframes show it ended the week with a Dragonfly Doji. However, broader patterns suggest it may again face resistance on a rise around its upper descending trend line of the symmetric triangle it is currently stuck in.
Bank Nifty ended Friday 1.02 percent higher at 26,766.85. It ended the session with a bullish body candle. Immediate support is placed around 26,650. The candle pattern suggests it may challenge its upside major resistance placed around 27,000 levels.
Based on a thorough technical study, the research firm recommends M&M Financial Services for the near term:
M&M Financial Services | Rating: Buy | Target: Rs 530, stop loss: Rs 470, Return: 7%
The stock ended the week with a symmetrical triangle breakout. A symmetrical triangle breakout implies, continuation of bullish trend while the primary uptrend is still well intact.
Based on above mentioned observations, the firm recommends M&M Financial as a buy on dips for the short term upside target of Rs 530.
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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