As long as Nifty sustains above 11,540-11,520 levels, one can trade with buy on dip strategy.
New high by Nifty attracted profit booking from ascending trend line on the weekly timeframe. Nifty on the weekly chart also formed Doji candlestick pattern. Stochastic and RSI divergence on lower time frame also suggest profit booking at higher levels.
Nifty is trading above its two major simple moving averages 50-DMA and 200-DMA that are rising and golden crossover formation will occur shortly attracting buying at lower levels.
Currently, prices are trading in a rising channel on lower time frame, however, lower support line of channel stands around 11,610 marks. A decisive close below channel support line will push prices lower towards the line of parity placed near 11,540 levels. Moreover, as long as Nifty sustains above 11,540-11,520 levels, one can trade with buy on dip strategy.
Bank Nifty hit record high of 30,648 levels last week and managed to close above psychological levels of 30,000 suggesting positive bias in short term as well as in mid-term. Moreover, the sharp upswing appears to have brought the index into an overbought zone which suggests some cooling off of oscillators in the near term.
Sustained trade above 29,500 levels is a good opportunity to trade with buy on dip strategy whereas a close below 29,000 will only change the current trend.
ICICI Prudential Life Insurance Company | Rating: Buy around Rs 353 | Target: Rs 400 | Stop Loss: Rs 326 | Upside: 13 percent
The scrip took a sharp rebound on upside after hitting the low of Rs 277 and started consolidating. It is going to form Inverted Head and Shoulder pattern on daily chart. Currently it gave trend line breakout on upside which suggests further optimism. Positive crossover of MACD in negative territory is showing firmness on weekly chart which indicate support at current levels. One can go long in the stock around the level of Rs 353 for the target of Rs 400 with stop loss of Rs 326 levels.
Hindustan Zinc | Rating: Buy around Rs 280 | Target: Rs 305 | Stop Loss: Rs 267 | Upside: 9 percent
The stock has maintained its uptrend on the long term after bottoming out at Rs 243 levels. Bullish crossover is seen in the scrip as 20 DMA crossed 50 DMA from downward side which indicate upside move. At the current juncture, the stock has formed a pole and flag pattern on the medium term interval and it is waiting for the breakout above the same. Moreover, declining histogram of MACD in negative territory suggest buying in the scrip. We suggest buying this stock around Rs 280 with a stop loss of Rs 267 for the target of Rs 305.
MindTree | Rating: Buy around Rs 938 | Target: 1,000 | Stop Loss: Rs 906 | Upside: 7 percent
The scrip spurted from a low of Rs 781, it showed pullback on upside marked the high of Rs 976 marks and started consolidating there. This pullback rally and consolidation has taken the form cup & handle pattern from last few days. Currently, it is waiting for the breakout on upside so that it can accelerate buying momentum further.
Emerging line of polarity on daily time frame of chart is suggesting bullish momentum in the scrip. Indicator and oscillator also are also showing conducive scenario in the coming sessions. So based on the mentioned technical structure one can go long in the scrip around Rs 938 for the target of Rs 1000 marks with stop loss of Rs 906 marks
Axis Bank | Rating: Buy around Rs 746 | Target: Rs 790 | Stop Loss: Rs 720 | Upside: 6 percent
The stock has corrected from the peak of Rs 787 and currently it has shown signs of bottoming out around Rs 757-763 levels. Formation of series of dojis on daily chart is showing halt in its downswing. Emergence of green doji near demand zone which comes at 20 DMA on daily chart showing the possibility of bounce back further on upside. With decent volume participation witnessed, we recommend a buy in this scrip at Rs 746 with stop loss of Rs 720 for an upside target of Rs 790 levels.
Supreme Industries | Rating: Buy around Rs 1,120 | Target: Rs 1,180 | Stop Loss: Rs 1,085 | Upside: 5 percent
Bargain hunting is seen at lower levels in the scrip from where it formed a strong base. Currently, it has given breakout from its inverted Head and Shoulder pattern with decent volume. It also took support from its 20 DMA while bouncing back on upside. Indicator and oscillators also lending support to the price action. Trader can take entry from the level of Rs 1120 for the target of Rs 1180 while keeping stop loss of Rs 1085 marks.
(The author is Head of Technical & Derivative Research at Narnolia Financial Advisors)Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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