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Last Updated : Apr 04, 2018 09:20 AM IST | Source: Moneycontrol.com

Pullback rally on Nifty could extend towards 10,500 levels; 3 stocks to track

The ongoing correction could possibly continue with an intermediate support around 10,100-10,150 levels. The advance and decline ratio is in the favor of bulls which add to our conviction.

 
 
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Dyaneshwar Padwal

We are of the opinion that Nifty is initially heading for 10500 mark which is 50% Fibonacci retracement of the previous fall. In the current market scenario, Nifty is unfolded into a corrective pattern, where it took support at 10,000 and managed to close above 200-days simple moving average (DMA) placed at 10,186.

The ongoing correction could possibly continue with an intermediate support around 10,100-10,150 levels. The advance and decline ratio is in the favor of bulls which add to our conviction.

Close

However, within given correction, the index may witness pullbacks until 10,450-10,500 levels. On failure to surpass 10,500 mark, bears may take over and may perpetrate the 200-day simple moving average support.

In this market scenario relative rotation graph illustrate on the weekly time frame charts. IT and FMCG sector which is oscillating in leading quadrant might continue to travel north.

Earlier Bank Nifty bounced back towards the 200-days SMA but failed to surpass 25000 mark as bears took the charge and dragged the indices towards 23600 level.

However, the ongoing corrective leg is limited until 24000, within a given correction pullback may continue towards 200-days simple moving average which is placed near 24860.

Here is a list of top three stocks which could give up to 14% return in the next 2-3 weeks:

Tata Chemicals Ltd: BUY| Target Rs760| Stop Loss Rs695| Return 6%

In the current scenario, Tata Chemicals on the weekly charts is moving in a clear uptrend. The recent price action in the stock suggests that it is poised for an initial leg of upmove towards 760 levels. Traders can buy with a stop loss below 695. The holding period should be more than two weeks.

NCC Ltd: BUY| Target Rs138| Stop Loss Rs122| Return 8%

NCC is unfolded in a corrective move where it completed its move at an important Fibonacci retracement of 61.8% of the previous bull move. The recent move suggests that it is poised for the next leg of up move towards 138.

Traders can go long on the stock at CMP by keeping a stop loss below Rs122 on a closing basis. The holding period should be more than two weeks.

Biocon Ltd: BUY| Target Rs644| Stop Loss Rs588| Return 6%

The secular uptrend is still intact in Biocon and the recent pullback should be capitalized as buying opportunity. The recent move suggests that the uptrend has been resumed with the intermediate support of 588.

Intermediate resistance is placed at 644. The holding period should be more than two weeks.

Disclaimer: The author is AVP, Technical Analysis at KIFS Trade Capital. 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 Apr 4, 2018 09:20 am
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