Nifty may again challenge critical resistance placed around 10,700; Buy JSPL for short term

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Jaydeb Dey

The Nifty on Friday ended 0.7 percent higher at 10,692.30. Gap up opening followed by consolidation around 10,700 mark led the bench mark index closing with a bullish body candle. Breaking out critical resistance placed around 10,640 is a positive development and may take the bench mark index towards 10,740 and 10,780. Hence buy-on-dips is advised. Downside pivotal supports are now placed around 10,640 and 10,600.

On the Nifty hourly chart; ADX is trending higher and recovered above twenty despite RSI shows negative divergence, which implies this uptrend is likely to continue further towards 10,740 and 10,780.

Nifty patterns on multiple time frames show; it ended the session with a bullish body candle around 61.8% Fibonacci retracement, placed around 10,700, of the entire correction from Nifty all time high to its recent low around 9950 levels. Hence, next leg of up-move towards 10,740 is likely. 10,640 may now act as the critical support.

The Bank Nifty previous Friday ended 1.53 percent up at 25,394.60. Upside resistance is placed around 25,750. Downside pivotal support is placed around 25,340.

Based on thorough technical study, the research firm recommends Jindal Steel & Power which can give up to 5% return in the near short term:

Jindal Steel & Power | Rating: Buy | Target: Rs 264, stop loss: Rs 243, Return: 5%

After a downward trend line breakout the stock currently is trading above the 30 EMA on daily chart. Position of leading indicators suggests, the stock is about resume next leg of up-move towards Rs 260 levels.

Based on above mentioned observations, the firm recommends JSPL as a buy for the short-term upside target of Rs 264.

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.