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Uptrend likely to continue; Nifty may trade in a range of 12,450-12,100

The chart pattern suggests that if Nifty crosses and sustains above 12,300, it would witness buying which would lead the index towards 12,360-12,450 levels.

December 30, 2019 / 10:34 AM IST
 
 
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Rajesh Palviya

Nifty started last week on a flat note and traded with extreme volatility on either side throughout the week. Nifty closed at 12,246 with a loss of 26 points on a weekly basis.

On the weekly chart, the index formed a Doji candlestick formation, indicating indecisiveness amongst market participants regarding the direction. The index is moving in a higher top and higher bottom formation on the weekly chart, indicating positive bias.

The chart pattern suggests that if Nifty crosses and sustains above 12,300, it would witness buying which would lead the index towards 12,360-12,450 levels.

However, if the index breaks below 12,150, it would witness profit-booking which would take the index towards 12,080-12,000 levels.

Close

Nifty is trading above 20,50 and 100-day SMA's which are important short-term moving average, indicating positive bias in the short to medium-term.

Nifty continues to remain in an uptrend in the medium-term, so buying on dips continues to be our preferred strategy.

For the week, we expect Nifty to trade in the range of 12,450-12,100 with a positive bias.

The weekly strength indicator RSI and momentum oscillator Stochastic have both turned positive and are above their respective reference lines indicating positive bias.

Option data :

The index has witnessed smart buying action at the beginning of the January series and managed to surpass 12,200 level. The derivative data suggests the highest call concentration and call writing activity has been witnessed at 12,300 strike followed by 12,500 strike price, which is likely to act as major resistance at the current juncture.

Similarly, the highest put concentration and put writing activity existed on 12,100, followed by 12,000 strike price, which signifies 12,100 and 12,000 are likely to act as support for the January 2020 series.

Bank Nifty Outlook :

Bank Nifty started last week on a flat note and traded with extreme volatility on either side throughout the week. Bank Nifty closed at 32,412 with a gain of 27 points on a weekly basis.

On the weekly chart, the index has formed a Doji candlestick formation indicating indecisiveness amongst market participants regarding the direction.

The index is moving in a higher top and higher bottom formation on the weekly chart indicating a sustained uptrend.

The chart pattern suggests that if Bank Nifty crosses and sustains above 32,500, it would witness buying which would lead the index towards 32,800-33,150 levels.

However, if the index breaks below 32,050, it would witness selling which would take the index towards 31,750-31,350.

Bank Nifty is well placed above its 20, 50 and 100 SMA, indicating sustained uptrend in the short to medium-term.

Bank Nifty continues to remain in an uptrend in the medium-term, so buying on dips continues to be our preferred strategy.

For the week, we expect Bank Nifty to trade in the range of 33,150-31,950 with a positive bias.

The weekly strength indicator RSI and momentum oscillator Stochastic have both turned positive and are above their respective reference lines indicating positive bias.

Stocks :

Amber Enterprises India | Buy | LTP: Rs 1,091.90 | Target price: Rs 1,145-1,170 | Stop loss: Rs 1,025 | Upside: 7 percent

The stock has made a new 52-week high this week on closing basis indicating good participation by the bulls.

On the weekly chart, the stock price has closed above the 61.80 percent retracement of Rs 1,058 of its previous down move (Rs 1,326-620).

Amber

It continues to make a series of higher tops and higher bottoms, indicating a sustained uptrend.

Weekly strength indicator RSI and momentum oscillator stochastic are in the positive territory which supports upside momentum to continue in the near- term.

The stock price is sustaining well above its 20 and 50 and 100 day SMA which supports bullish sentiments ahead.

Equitas Holdings | Buy | LTP: Rs 105.25 | Target price: Rs 112- 114 | Stop loss: Rs 100 | Upside: 8-10 percent

On the daily chart, the stock price has bounced from 38.20 percent retracement of 101.80 level of the recent rally (Rs 114-82).

This support zone also coincides with its six months “Down Sloping Trend line” support zone at Rs 101, indicating resumption of the previous uptrend. The daily strength indicator RSI is in positive territory which supports upside momentum to continue in the near-term.

Equitas

The stock price has also bounced from the 100-day SMA (Rs 102.59) which supports bullish sentiments ahead.

Ratnamani Metals & Tubes | Buy | LTP: Rs 1,063.45 | Target price: Rs 1,110-1,130 | Stop loss: Rs 1,005 | Upside: 7-9 percent

On the weekly chart, the stock price has decisively broken out of its last six month's rounding formation around Rs 1,000 on the closing basis, representing a continuation of the short-term trend.

Ratnamani

It also continues to make a series of higher tops and higher bottoms, indicating a sustained uptrend.

On the weekly chart, the MACD indicator has recently given a bullish crossover that supports upside momentum to continue in the near-term.

The stock is well placed above its 50, 100 and 200-day SMA which supports bullish sentiments in short to medium-term.

PVR | Buy | LTP: Rs 1,883.60 | Target price: Rs 1,970- 2,000 | Stop loss: Rs 1,800 | Upside: 6 percent

On the weekly chart, the stock has decisively broken out from a four months' flag pattern (a continuation formation) and is sustaining above the same on a closing basis.

PVR

It has also broken out from a major resistance of Rs 1,850, representing sustained uptrend. On the daily chart, the stock has also closed above the upper Bollinger band for the first time in the last 3 months, indicating a strong uptrend.

The weekly strength indicator RSI and the momentum indicator Stochastic both are in positive territory which supports upside momentum to continue in the near-term. The stock is sustaining well above its 20 and 50 day SMA which supports bullish sentiments ahead.

(The author is Technical & Derivatives Research Head at Axis Securities Limited)

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.​
Moneycontrol Contributor
first published: Dec 30, 2019 10:34 am

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