Shabbir Kayyumi of Narnolia Financial Advisors sees support for the Nifty at 10,500 and 10,440 levels on the downside
Narnolia Financial Advisors
Bears have been left bruised due to the ongoing recovery in the dollar-rupee and decline in crude oil prices. After a counter-attack by bulls from the lows of last week, the Nifty closed almost near its weekly highs and gave a decisive break out of the tight range 10,450-10,650, which indicates strong bull power at the lower end.
On Friday, Nifty future saw additional open interest (OI) build-up of 5.67 lakh shares, totalling to 2.43 crore. A higher closing along with an increase in OI clearly indicates fresh long build-up in index futures contracts. The probability of upside till 10,750-11,085 (50 percent to 61.8 percent retracement of the recent down move) certainly looks open on the cards since it decisively closed above 10,650 levels.
Moreover, momentum indicator relative strength index (RSI) is looking firm and trading above 50, which suggest further move on the upside. At the same time, occurrence of one of the most important bearish formation of moving averages -- Death Cross -- in the Nifty suggests a sell on rise strategy in the mid-term. The 50 and 200 daily moving average and unfilled bearish gap between 10,755 and 10,821 confirms strong resistance near 10,750-10,800.
The Nifty has to hold above 10,650 levels to witness an up move towards 10,750 and 10,850 levels. On the downside, supports exist at 10,500 and 10,440 levels.
The banking index closed in positive territory last week and gave a breakout above its immediate trading range by closing above 26,050 levels. Since it is also trading above all major moving averages, the short term trend looks positive and immediate resistance is only around 26,500 and 26,800 levels.
Dilip Buildcon | Rating: Buy around Rs 465 | Target: Rs 550 | Stop loss Rs 419| Upside 18 percent
Prices of Dilip Buildcon has seen a sharp rebound after hitting a low of Rs 400. Recently it has taken support from the line of polarity on weekly time frame suggest strong support on the lower side. It has witnessed heavy volume around Rs 420 levels, from where it is catching momentum on the upside. Sustainability of RSI above 50 is also implying upsurge move. Immediate swing resistance lies around Rs 600 & support at Rs 400, the aforementioned rationale suggests buying in the scrip around Rs 465 for the target of Rs 550 with a stop loss of Rs 419 as a good bargain hunting opportunity.
Just Dial | Rating: Buy around Rs 491 | Target: Rs 550| Stop Loss: Rs 459| Upside 12 percent
Just Dial is trading in a broader range of Rs 640 on higher side and Rs 400 on the lower side, since the start of 2017, i.e. almost 2 years now. Recently, it took support from its lower levels of trading range at Rs 400 and bounced back sharply. As of now, it is trading above 20 DMA & 50 DMA signify positive bias in short term as well as in mid-term. At the same time, it got confirmation from its momentum indicator RSI as it also trading above important 50 marks. Moreover, Bullish crossover in stochastic showing support for Bulls which can take it further higher. Once it will breach the levels of Rs 503 which is 200 DMA, prices will trade in the new range. Buy Just dial around Rs 491 with the stop loss of Rs 459 for the target of Rs 550.
Blue Star | Rating: Buy around Rs 600 | Target: Rs 668 | Stop Loss: Rs 560| Upside 11 percent
After finding bottom near the levels of Rs 500-510 zones, Blue Star took a flip for moving towards on north side. Currently, it gave breakout above its neckline of Inverted Head and shoulder pattern and also gave decisive closing above the neckline which indicate further strength in the pattern. As per pattern target is coming around at Rs 668 levels. From last few days, it has been trading above its 20 DMA which is found around its Rs 560 levels also implying further strength in short term. Moreover, Momentum indicator RSI is also looking firm above 50 suggest further move in same direction. Buy Blue Star around Rs 600 with stop loss of Rs 560 for the target of Rs 668 levels.
Dabur India | Rating: Buy around Rs 384 | Target: Rs 420 | Stop Loss: Rs 362| Upside 9 percent
Dabur India is recently bottomed out around Rs 365 and then rallied over more than 10 percent after showing positive divergence in RSI. Recently, stock is consolidating above its 200 DMA which comes near Rs 383 levels which is giving cues for moving on upside. The MACD has given bullish crossover on daily chart in negative territory implying strength. RSI also seems to be bottoming out from its oversold zone and trading above 50 marks, which further confirms its bullish bias. 100 DMA is trading around Rs 415 levels; closing above it will increase buying momentum further. One can go long in the scrip around Rs 384 with stop loss of Rs 362 for the higher target of Rs 420.
Britannia Industries | Rating: Buy around Rs 5920 | Target: Rs 6250| Stop Loss: Rs 5650| Upside 6 percent
Britannia Industries recently bottoming out near the Rs 5300-5325 zones, stock is retracing previous down fall and recently closed above its previous swing top, indicating bullish bias in short term. Currently, it gave breakout above its neckline of Inverted Head and shoulder pattern and also gave decisive closing above the neckline & 38.2% retracement Fibonacci levels which indicate further strength in the pattern. As per pattern target is coming around at Rs 6250 levels. It is trading above 200 DMA also, which point towards bullish bias in long term too. We suggest buying Britannia Industries around Rs 5920 with Stop loss of Rs 5650 for the target of Rs 6250 levels.Disclaimer: The author is Head-Technical & Derivative Research at Narnolia Financial Advisors. 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.