Shabbir Kayyumi
Last week, the index breached the low of the prior week on Monday itself, but it made a strong retracement as the week progressed, which suggests the continued domination of bulls. The index has formed a long body bullish candlestick pattern on the weekly timeframe, and the overall structure looks promising.
The Nifty is trading higher above all popular moving averages (20/50/100/200) DMA, indicating a strong bullish bias to continue further. At the same time formation of Golden Crossover of 50*200 DMA last month indicates strong price action in favour of bulls in ahead.
A lot of activity in the FNO segment is seen, whereas the highest Open Interest (OI) in Put is around 12,000 strikes, followed by 11,900 strikes; whereas maximum Open Interest (OI) in Call is around 12,200 level, followed by 12,300 strikes that suggest that the trading range for the month is between the 11,800 and 12,300 mark.
Banking index has managed to close above its previous crucial high (30,800) and the major psychological level of 32,000, indicating strong strength in the current up move.
As long as the banking index sustains above the 31,300 mark, it can extend higher towards its life high placed around the 32,157 level and higher towards 33,000.
Trade recommendation
The Tinplate Company of India | Rating: Buy around Rs 132 | Target: Rs 152| Stop loss: Rs 119| Upside: 15 percent
The stock has broken the yearly long downward trend line and has now retested the same, with the RSI pulling back to neutral zones, giving us a reason for a risk-reward favourable entry.
The momentum indicator MACD has crossed the signal line, indicating the start of a long term trend. The momentum indicator Weekly RSI too is above its key 60 mark, indicating momentum on its side.
We recommend a buy-in Tinplate around Rs 132 with a stop loss of Rs 119 for the target of Rs 152 on higher side.
Bank of Baroda | Rating: Buy around Rs 100 | Target: Rs 112 | Stop loss: Rs 92| Upside: 12 percent
The stock has multiple supports in the Rs 94-96 zone and has witnessed a positive bounce back from the lower range this week. Key technical indicators are poised positively above the neutral line, signalling strength on this counter.
A higher bottom with extended green body indicates a pullback rally on upside. One can take a long position around Rs 100, keeping a stop loss of Rs 92 for the target of Rs 112 mark.
Grasim Industries | Rating: Buy around Rs 775 | Target: Rs 865 | Stop loss: Rs 718| Upside: 11 percent
Grasim Industries has been gradually inching higher from the last two to three months after forming a strong base at the 20 WMA on the weekly chart. On the daily chart, it has been forming the multi inverted head and shoulder pattern from the last few days, which suggests momentum gathering on the upside.
A few days before, it broke out from this pattern but failed to sustain above the same. However, from the last few trading sessions, it has been forming a setup of buying from where it will resume its uptrend.
Considering the overall trend and buoyancy, this dip can be utilized to create a fresh long position around Rs 775 with a stop loss of Rs 718 for the target of Rs 865 mark.
The author is Head - Technical & Derivative Research, Narnolia Financial Advisors.
Disclaimer: The views and investment tips expressed by investment experts 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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