Sumeet Bagadia
After forming a ‘Shooting Star’ candlestick followed by ‘Long Bearish’ candle with Open High at the same level indicates a bearish signal and we have witnessed the same during the last two weeks as well.
However, the Nifty has strong support placed around 10,800-level which is at the lower band of the upward rising channel formation in which the Nifty has been trading since many weeks.
Besides this, the Nifty has been trading with a strong support placed at 50-weeks moving average at 10,690 level and 21-weeks moving average support which is there at 11,060 level suggesting positive trend for the time being.
After giving a breakdown of its lower band of the upward rising channel formation on the daily chart, the Nifty plunged more than 750 points as well as has given a close below its 50-days moving average which was placed at 11,342 level which normally indicates a downside movement on a smaller time frame.
We can see a strong support placed at 10,748 level which is a Great Wall of China and the Nifty has been respecting this wall since last two years.
Weekly RSI’s reading is at 53.89 level with a negative crossover, though it has a strong support of its upward rising trend line which points out for a bounce back move.
Based on the above structure, we can say that the Nifty has a downside room but with respect to ratio, the Nifty has more room for an upside rally.
But, long-term trend will depend on a monthly closing basis as it seems that the Nifty is forming an Opening Black Marubozu Candlestick which is a bearish reversal indication. If that happens then we may witness a healthy correction.
Here is a list of top three stocks which could give 7-14% return in the next one month:
Oil India: LTP: Rs 218| Buy at Rs 218.65-216.50| Stop Loss: Rs 209| Target: Rs 235| Return 8%
On the daily chart, the stock has given a breakout of its Symmetrical Triangle formation with above-average volume which indicates a robust upside movement in the counter.
Moreover, the stock has managed to close above its 21 & 50-days moving average which shows a positive trend in the stock.
On the weekly chart as well, the stock has sustained above its 200-weeks moving average placed at Rs 214.50 level which suggests an upside movement.
A daily momentum indicator RSI reading is at 65.49 level with a positive crossover. The RSI has also given a breakout of its downward falling trend line which points out for a positive breath in the stock.
Bharat Petroleum Corporation: LTP: Rs 375| Buy: Rs 376.50| Stop Loss: Rs 348| Target: Rs 390-403| Return: 7%
On the daily chart, the stock has given a breakout of its inverse H&S pattern which suggests positive momentum can be seen in the near future.
Moreover, on the daily chart, the stock is trading above its 20 and 50-days moving averages which shows the dominance of the stock.
The momentum indicator RSI reading is at 58.09 with positive biases as well as positive divergence has been observed which is a signal of optimism.
Bharti Infratel: LTP: Rs 279.90| Buy at Rs 281.20| Stop Loss: Rs 263.20| Target: Rs 320| Return: 14%
On the daily chart, the stock has given a breakout of its rounding bottom which suggests positive momentum can be seen in the near future.
Moreover, on the daily chart, the stock is trading above its 20-days moving average which shows the dominance of the stock. The momentum indicator MACD, Signal line has given breakout above MACD which suggest a signal of optimism.
Disclaimer: The author is Associate Director at Choice Broking. 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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