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'Fibonacci retracement suggests Nifty may touch 12,250 before bears make an entry'

Prices are trading above all major short term and medium term moving average and momentum indicators are trading in bullish zone. The setup is suggesting that bulls can ride this rally till 12,250.

November 28, 2019 / 01:55 PM IST
 
 
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Bulls have dominated the market since the last three sessions with Nifty50 witnessing all-time high. Even though the bulls have taken the charge, we believe investors need to take a cautious approach at this juncture.

We are expecting heavy volatility in coming days and stock-specific action is likely to prevail. We are trading at that stage where bears are on the back foot but bulls might go through profit booking.

Traders need to adopt a professional approach and trade with predefined levels. As of now, the steam is still left in Nifty50 till 12,250. Taking the Fibonacci retracement into consideration, the monthly projected 38.2 retracement level is 12,250 and it could be in the offing in the coming days.

As we have seen a one-sided rally so far, we believe that higher levels should be used for profit booking as the level is unlikely to breach in one attempt. Prices have taken support at 20-DMA and rally seems to be resuming again.

Close

Prices are trading above all major short-term and medium-term moving averages and momentum indicators are trading in the bullish zone. The setup is suggesting that bulls can ride this rally till 12,250.

The immediate support exists at 11,991, and we could sharp see profit booking if the level gets trades on the lower side. The next few trading sessions are likely to be difficult for the traders as cautious buying is still allowed as per technical structure but profit booking at higher levels is not ruled out.

Apart from this fresh short positions can also be initiated once 11,991 trades on lower. Next few trading sessions are likely to be stock specific where action on both the side is expected.

Here are 3 stocks which could provide 4-8 percent return in the short term:

Hindustan Unilever | Rating: Buy | CMP: Rs 2,093.25 | Target: Rs 2,220 | Stop Loss: Rs 2,000 | Return: 6 percent

The stock is going through the classical phase of reversal after a retracement. It has corrected decently from all-time highs and the fall has been arrested at 50 EMA support. There is the formation of bullish engulfing candlestick formation. Weekly and daily RSI suggesting that stock is ready for a new leg of the rally after a decent correction and can be bought for short term gains.

Maruti Suzuki | Rating: Buy | CMP: Rs 7,294.40 | Target: Rs 7,658 | Stop Loss: Rs 7,089 | Return: 5 percent

The stock is going through a phase of consolidation after a recent correction. The recent fall in the counter has been abated at the previous top and the cycle of higher top and higher bottom is still intact. The sign of revival has now been witnessed as short term moving averages curve have started trading northwards. Overall structure suggesting that bargain buying opportunity is available in the counter and it can be bought for short term gains.

Infosys | Rating: Sell | CMP: Rs 695.75 | Target: Rs 667 | Stop Loss: Rs 725 | Return: 4 percent

The recent up move in the stock seems to be more of a pullback move as stock is still trading below the previous tops. In the recent rally, the counter has taken resistance at 50EMA and formed spinning top candlestick formation which was followed by a big red candle. The rising trend line support has also been broken on the downside and suggesting further weakness. Traders can expect further weakness in coming days and can initiate short positions for short term gain.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Moneycontrol Contributor
first published: Nov 28, 2019 01:55 pm

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