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Last Updated : Apr 27, 2018 11:33 AM IST | Source: Moneycontrol.com

Nifty may challenge critical resistance placed around 10,640; Buy Tata Steel for short term

“Nifty continues consolidating around 50% Fibonacci retracement of the last downfall from the all-time high. Indication of reversal is not visible yet.” says Jaydeb Dey, Technical Analyst at Stewart & Mackertich Wealth Management Ltd.

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Jaydeb Dey

The Nifty ended Thursday 0.47 percent higher at 10,619. Session long consolidation around 10,550 levels followed by a sharp recovery in the last hour led to a Hammer candle on the daily chart. The candle pattern suggests Nifty may once again retest critical resistance placed around 10,640 levels.

The next leg of the upmove towards 10,670 levels is likely if and only if 10,640 gets taken out decisively. Downside supports are placed around 10,560 and 10,530 levels.

Close

On the hourly chart, Nifty ended with a Flag pattern breakout, which implies its critical resistance placed around 10,640 levels may again be challenged. Downside supports are placed around 10,560 and 10,530 levels.

Nifty patterns on multiple timeframes show it ended the session with a Hammer candle on the daily chart, a positive. However, critical resistance of 10,640 has to be taken out on the upside for the next leg of the upmove to 10,670.

The Bank Nifty on Thursday ended 0.79 percent up at 25,010.90. Upside resistances are placed around 25,100 and 25,250 levels. Downside pivotal support is placed around 24,700 levels.

Based on thorough technical study, the research firm recommends Tata Steel which can deliver up to five percent return in the short-term:

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

After reacting down from its recent high of Rs 624 per share, the stock is again approaching the long-term upward trendline support placed around Rs 570 levels. Based on above mentioned observations, we recommend a buy on Tata Steel for the short-term upside target of Rs 600 per share.

Disclaimer: The author is Technical Analyst at Stewart & Mackertich Wealth Management. The views and ideas expressed above may have been suggested to the clients of Stewart & Mackertich Wealth Management. It is advised that investors/traders should consult with their certified experts before taking any investment decision.

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First Published on Apr 27, 2018 09:02 am
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