“Nifty is making headway towards 10,500 and 10,570. Buy-on-dips is advised.” says Jaydeb Dey, Technical Analyst at Stewart & Mackertich Wealth Management Ltd.
The Nifty yesterday ended 0.4 percent up at 10,458.65. It broke out the critical resistance of 10,420, 38.2 percent Fibonacci retracement level of the entire correction from Nifty all time high to its recent low around 9,950 levels, as communicated in our previous post and finished off the session with a bullish body candle.
Ending the day above 10,430 is a mark of renewed strength and broadens the possibility of Nifty heading towards 10,570. Midway resistance is placed around 10,500. Hence intraday dip towards 10,420 might be an ideal opportunity to accumulate up-trending blue-chip stocks for the next round of up-move.
On a similar note, third attempt breakout of pivotal resistance placed around 10,420 while global cues do not look in favour of the aggressive bulls seems invigorating.
On the Nifty hourly chart; Nifty continues moving higher despite flattening RSI, which is pointing towards strengthening trend. Upside resistances are placed around 10,500 and 10,530.
Nifty patterns on multiple time frames show; it broke out 38.2 percent Fibonacci retracement level, placed around 10,420, of the entire correction from the all-time high to its recent low around 9950 and likely to move up further towards 10,500 and 10,570.
The Bank Nifty previous session ended 0.39 percent up at 25,195.10. Downside pivotal support is placed around 24,950. Upside major resistance is placed around 25,250.
Based on thorough technical study, the house recommends United Breweries which can give up to 5% return in the short term:
United Breweries | Rating: Buy | Target: Rs 1085, stop loss: Rs 990 | Return: 5%
Down trending channel breakout in the stock followed by successful closing above 30 daily EMA is seen. Yesterday, it finished off the session with a bullish candle above critical resistance placed around Rs 1025 levels. Downward trend line breakout in RSI in tandem with current uptrend makes it a valid breakout.
Based on the above mentioned observations, the house recommends UBL as a buy on dips for the short-term upside target of Rs 1085.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 .The Great Diwali Discount!
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