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See Nifty at 10,780-10,840 levels, buy on dips

“At present, the Nifty is trading well above all crucial moving averages. Hence, a buy-on-dips strategy is advised,” says Jaydeb Dey of Stewart & Mackertich Wealth Management

June 11, 2018 / 08:06 AM IST
 
 
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Jaydeb Dey

The Nifty on Friday ended 0.01 percent lower at 10,767.65. It opened the session on a weaker note and found support around 10,700 levels (day’s low was 10,709.05), before ending the session with a Hammer candle. It continues to oscillate in a narrowing price range.

Last week, it ended 0.67 percent higher up with a Dragonfly Doji candle. This candle pattern on the weekly chart implies accumulation on dips. Also, double bottom formation around 10,550 levels is clearly visible.

The broader chart pattern suggests the benchmark index is likely to challenge its upside resistance placed around 10,780 and 10,820 levels. Immediate critical support is placed around 10,700 levels. 30-day exponential moving average (EMA) on the daily chart is placed around 10,630, which may act as the second critical support.

On the Nifty hourly chart, the sharp gap-down opening found support around 10,700 levels. It reverted back, filling up that gap. At present, it is trading well above all crucial moving averages. Hence, a buy-on-dips strategy is advised.

Close

Nifty patterns on multiple timeframes show it finished off the last session of the week with a Hammer candle, which points towards continuation of the uptrend. Broader chart patterns suggest the benchmark index is likely to challenge higher resistances placed around 10,780 and 10,840.

The Bank Nifty on Friday ended 0.25 percent lower at 26,451.35. It ended the session with Doji candle. Downside pivotal support is placed around 26,100 and upside resistances are placed around 26,600 and 26,700 levels.

Based on a thorough technical study, the research firm recommends Punjab National Bank for the short term:

Punjab National Bank | Rating: Buy | CMP- Rs 90.45, Target: Rs 95, stop loss: Rs 85, Return: 5%

After a prolonged downfall, the stock has finally recovered above 30 EMA on daily chart placed around Rs 87. Ending the week above 30 daily EMA on daily chart on the last session of the week suggests, the stock is likely to move higher in coming sessions. Rising OI is last few sessions makes the bull case even stronger.

Based on above mentioned observations, the firm recommends PNB as a buy on dips for the short term upside target of Rs 95.

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.
Moneycontrol Contributor
first published: Jun 11, 2018 08:06 am

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