By Aditya Agarwala
The Nifty Index Futures has taken support at the lower end of the Broadening Wedge pattern and is currently consolidating in a channel pattern.
The upper end of the channel is placed at 10630, and a breakout from the upper end of the channel can trigger a short covering rally to levels of 10720-10820 which is being 50 percent and 61.8 percent Fibonacci retracement levels respectively.
However, failure to breakout from the upper end of the channel i.e. 10630 can lead to fresh selling dragging it to levels 10440-10280.
Moreover, the relative strength index (RSI) is currently at the neutral level of 50; a move above can lead to further short covering rallies.
Future Lifestyle Fashions Ltd: BUY| Target Rs475| Stop Loss Rs340| Return 27%
On the weekly chart, Future Lifestyle Fashions Ltd. (FLFL) is on the verge of a breakout from a Triangle pattern suggesting resumption of the Bull trend on cards. The neckline of the pattern is placed at 398 (as indicated on chart); breakout from the pattern higher volumes may trigger a bullish breakout.
On the daily chart, the stock is on the verge of a breakout from a consolidation phase started forming the affirming start of a bull trend.
The RSI has formed a positive divergence with respect to price after taking support at the 50 level. The stock may be bought in the range of 370-380 for targets of 440-475, keeping a stop loss below 340.
Castrol India Ltd: BUY| Target Rs238| Stop Loss Rs170| Return 20%
On the weekly chart, Castrol India Ltd has turned upwards after testing the lower end of the channel suggesting bullishness. Further, it is approaching upper end of the channel placed at Neckline of the pattern is at 213-228; sustained trade above the neckline with healthy volumes can extend the up move.
On the daily chart, the stock has broken out from a flag pattern on good volumes affirming strong bullishness. RSI has turned upwards breaking out of the upper band of the Bollinger Bands suggesting higher levels in the coming trading sessions.
The stock may be bought in the range of 195-200 for targets of 228-238, keeping a stop loss below 170.
JK Lakshmi Cement Ltd: BUY| Target Rs510| Stop Loss Rs400| Return 18%
On the weekly chart, JK Lakshmi Ltd. (JKLAKSHMI) is on the verge of a breakout from a Triangle pattern suggesting the start of a bull trend on cards.
Further, a sustained trade above 462 i.e. neckline of the pattern can extend the uptrend in the coming trading sessions. On the daily chart, it is making higher high and higher lows affirming the strength.
Further, RSI has also broken down from the lower Bollinger band suggesting lower levels.
The stock may be sold in the range of 430-435 for targets of 475-510, keeping a stop loss below 400.
Disclaimer: The author is Technical Analyst at YES Securities. 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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