Shabbir Kayyumi
Nifty traded in a tight range of mere 200 points in the last week. Flat bottom candlestick pattern on a weekly Heikin Ashi chart suggests bulls still have an upper hand. Additionally, Nifty is trading above 89-DMA (high) and 89-DMA (low) indicates bullish bias to continue in mid-term and traders can take benefits of minor corrections for accumulation.
The possibility of trend reversal will increase only if Nifty trades below previous swing point of 10,888.
Recently, Nifty has given a breakout of a downward sloping trend line drawn connecting 12,430 and 12,240 levels. This scenario is continuity of positive movement in the coming sessions, too.
India VIX index is trading around 21.65 which is below its 10 DMA as well as 20 DMA. And volatility breakout is expected to come on decisive trading only above 23, till then lower volatility is expected which is a favorable factor for bulls as well. Prices will accelerate on a decisive close above a recent highest high level placed around 11,360 mark towards the unfilled gap standing around 11,633.
Bank Nifty
Bank Nifty traded in a range and gave a flat closing in the last week. The banking index is moving in expanding triangle type of pattern where a lower trend line is placed at 21,000 and a higher trend can be seen around 23,050 which suggests either side breakout will lead the directional movement.
Here is the list of three technical picks which could give double digit return:
Ujjivan Financial Services: Buy Around Rs 235 | Target: Rs 280 | Stop Loss: Rs 205 | Upside: 19 percent
Stock on the hourly chart has witnessed an Inverted Head & Shoulder 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 upmove and will test higher levels. Hence, looking at the current structure we recommend buying in the stock around Rs 238 with a stop loss of Rs 205 on closing basis for the target of Rs 280 and Rs 320 levels.
Punjab National Bank: Buy Around Rs 32 | Target: Rs 38 | Stop Loss: Rs 29.70 | Upside: 18 percent
Scrip spurted from a low of RS 26 after forming a Cup and Handle pattern, it showed pullback on upside marked the high of Rs 35.50 mark and started consolidating there. Currently, it is waiting for another breakout on the upside so that it can accelerate buying momentum further. Line of polarity on the daily time frame of chart standing around Rs 34 is suggesting bullish momentum in the scrip. Indicators and oscillators are also showing a conducive scenario in the coming sessions. So based on the mentioned technical structure one can go long in the scrip around Rs 32 for the target of Rs 36/38 levels keeping a stop loss of Rs 29.70.
Coal India: Buy Around Rs 131 | Target: Rs 150 | Stop Loss: Rs 122 | Upside: 14 percent
Bargain hunting is seen at lower levels in the scrip from where it formed a strong base near Rs 124-127 zone. Currently, it has given consolidation range breakout on the daily chart in which it has been trading from the last few days and the momentum oscillator RSI also turned above 50 mark which suggests a reversal is round the corner. Other indicators and oscillators also lent support to the price action. Traders can take an entry from the level of Rs 131 for the target of Rs 150 and Rs 165 while keeping stop loss of Rs 122 mark.
The author is Head of Technical Research at Narnolia Financial Advisors Ltd.
Disclaimer: 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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