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Nifty likely to head towards 10,250; Tata Steel a good buy, may test Rs 600 in near term

“Nifty is likely to challenge critical resistance placed around 10,250.” says Jaydeb Dey, Technical Analyst at Stewart & Mackertich Wealth Management Ltd.

April 02, 2018 / 08:56 AM IST
 
 
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Jaydeb Dey

Stewart & Mackertich Wealth Management Ltd.

The Nifty previous session ended 0.69 percent down at 10,113.70. Gap down opening amid overnight negative global cues followed by tiny range bound movement led to a bearish spinning top candle. Spinning top on daily chart implies indecision among traders ahead of long weekend.

However, prolonged critical support placed around 10,000 levels is intact. Hence, we do not recommend short selling at this juncture keeping in mind the Nifty prolonged support around 10,000 levels.

Also, RSI triple bottom formation on daily chart while Nifty downtrend being intact is pointing towards positive divergence. Downside pivotal supports are placed around 10,080 and 10,050.

On the Nifty hourly chart; huge positive divergence is seen in RSI and that may again take the index higher towards 10,210 and 10,250. Hence, buy on dips around critical supports is the strategy to be followed.

Close

Nifty patterns on multiple time frames show, it rebounded from the prolonged upward trending channel support and ended with a bullish body candle on the weekly chart. Hence, Nifty is likely to see buying on dips around critical supports. Nifty challenging critical resistance placed around 10,250 is a bright possibility.

The Bank Nifty previous session ended 0.7 percent down at 24,263.35.15. It may once again challenge 200 daily EMA placed around 24,470 and likely to breakout.

Based on thorough technical study, we recommend following stocks which can give up to 5% return in the near short term:

Tata Steel | Rating: Buy | Target: Rs 600, stop loss: Rs 555 | Return: 5%

After its recent correction from Rs 750 levels the stock is oscillating in the price band of Rs 555 to Rs 600. Midterm upward trend line support is placed around Rs 555 levels. On daily chart, the stock is trading in oversold zone. However, 600 may now act as the immediate pivotal resistance.

Based on the above mentioned observations, the  research firm has recommended Tata Steel as a strong buy at current market price for the near-term upside target of Rs 600.

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.
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