Shabbir Kayyumi
During the week, Nifty managed to trade above 11,400 and gave the highest weekly closing in spite of many whipsaws. Strong bullish candlestick pattern and flat bottom price action pattern with green color on Heikin-Ashi chart also indicates prices are not ready to trade lower though momentum oscillators are in the overbought zone.
Parabolic SAR a system based stop and reverse signals are in buy mode in both daily and weekly time frame suggests one should opt for buy on dip strategy moving further.
Furthermore, GUPPY Multiple Moving Averages is trading with buy signal in the daily time frame as short term moving averages are trading above long term moving averages which show bullish bias to continue going forward.
The crucial point for the continuity of the current trend is the recent swing pivot standing around 11,111 which is GANN swing number as well and any decisive trading below these levels can indicate trend reversal in short term and prices can trade lower towards 10,888.
At the same time, Nifty is trading in rising channel whereby lower trend line is placed around 11,230 levels and a higher trend line is standing around 11,600 marks, which suggests the uptrend is intact and the possibility of movement in this range in the coming week.
Bank Nifty traded with a positive bias through the last week and managed to give third consecutive higher weekly closing. The immediate hurdle is highest high of the last 5 weeks standing around 22,600 and any decisive trading above these levels will give a fresh breakout.
Trade Recommendations
Chalet Hotels | Rating: Buy around Rs 160 |Target: Rs 185 | Stop Loss: Rs 145 | Upside: 15 percent
The stock on the daily chart has witnessed a rounding bottom breakout and looks positively poised to trade higher. On the daily chart, scrip took support from line of parity and bounced back with marginally higher volumes, which suggest next upswing in the prices.
The key technical indicators in the near term time frame are in buy mode. The stock has the potential to continue the current up move and will test higher levels. Hence, looking at the current structure we recommend buying in the stock around Rs 160 with a stop loss of Rs 145 on a closing basis for the target of Rs 185 and 200 levels.
Federal Bank | Rating: Buy around Rs 55.50 | Target: Rs 63 | Stop Loss: Rs 51.90 | Upside: 13 percent
The stock price has broken out from the symmetrical triangle on the daily charts. It has closed above the consolidation range of the last few weeks with the higher volumes and is placed above all important moving average parameters. Oscillator setup is bullish on the short-term charts, and recommends buying the stock around Rs 55.50 with a target price of Rs 63 and a stop loss of Rs 51.90.
Century Plyboards | Rating: Buy around Rs 142 | Target: Rs 160 | Stop Loss: Rs 133 | Upside: 12 percent
This counter appears to be consolidating in a larger band of Rs 140– 124 for the last few weeks. Hence, dips are getting bought into, hinting at some sort of accumulation at lower levels. We believe once this counter manages a sustainable close above Rs 145, it can witness a swift move towards its logical targets placed around Rs 160. Therefore, advises positional traders to buy into this counter around Rs 142 levels. The stop loss suggested for the trade is a close below Rs 133.
The Author is Head of Technical Research at Narnolia Financial Advisors.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their 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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