Shabbir Kayyumi
Nifty snapped eight-day winning streak on March 22 as it closed in the red below 11,500 mark. Formation of Bearish Engulfing candle on Friday signals temporary halt in the up move.
At the same time, it has formed Doji candlestick pattern on the weekly time frame, which is indecisive in nature and breach of either the high (11,572) or the low (11,412) of the candle will decide the further direction. Break below 11,412 will see market taking support from the line of parity standing at 11,340 mark.
Important Trend line standing around 11,570, upper acceleration band placed around 11,564 and kagi resistance around 11,589 along with Fibonacci retracement level of 88.6 percent from swing top (11,760) to swing bottom (10,004) standing at 11,559 clearly shows a confluence area of 11,560-11,590 that is acting as a strong resistance zone for current up move.
Nifty is trading above its two major simple moving averages 50-DMA and 200-DMA which are rising and placed around 10,920 levels, interestingly occurrence of golden crossover formation in last week has established strong uptrend for mid-term.
Higher high- higher low formation continuously over the last 5 weeks supports this medium-term bull hypothesis. This medium-term bull trend key support level is a gap formed between 11,231-11,168.
Bank Nifty finally hit 30,000 mark achieving its target of symmetrical triangle pattern breakout. 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. As long as banking index trading above 28,750, the right strategy would be trading with buy on dip strategy.
Trade Recommendation
Escorts | Rating: Buy around Rs 780 | Target: Rs 900 | Stop Loss: Rs 720 | Upside: 15 percent
The stock is trading with higher high and higher low formation since Feb- 2019; however, it has confirmed uptrend recently after breaching previous swing top (Rs 750). At the same time scrip has given a breakout of cup and handle pattern around Rs 750 levels on weekly chart which is suggesting upsurge on the higher side for targets of Rs 900 marks. A small correction towards immediate support of Rs 780 levels can be bought for a pattern target of Rs 900 keeping stop loss of Rs 740.
Adani Power | Rating: Buy around Rs 47 | Target: Rs 54 | Stop Loss: Rs 43 | Upside 15 percent
The stock has witnessed descent from the peak of Rs 52.70 to recent swing bottom placed at Rs 33 levels. Emerging inverted Head & shoulder on the daily chart is suggesting a positive momentum. As of now, it indicated a bullish strength and has the potential to carry on the momentum still further upside. Indicators and oscillators are looking conducive for the price pattern. Looking at all these technical factors, we suggest buying in the scrip around Rs 47 with stop loss below Rs 43 on a closing basis for the target of Rs 54 levels.
REC | Rating: Buy around Rs 135 | Target: Rs 155 | Stop Loss: Rs 125 | Upside 15 percent
The stock has corrected from the peak of Rs 222 and it has shown bottomed out around Rs 89 levels. It made higher high and higher low formations on daily chart and trading in the rising channel on weekly which shows positive momentum in this stock. We can also see strong support at Rs 117 levels where 50 SMA exist; we suggest buying in the scrip around Rs 135 with stop loss below Rs 125 on a closing basis for the target of Rs 155 levels.
Thomas Cook India | Rating: Buy around Rs 220 | Target: Rs 245 | Stop Loss: Rs 206 | Upside: 12 percent
The stock has witnessed a decent correction from the peak of Rs 303 and it has bottomed out near Rs 194 to make the chart very attractive for accumulation. Strong support is seen near Rs 219 where 50 SMA is seen. RSI has indicated a trend reversal with a positive bias. Looking at good volume activity, we recommend a buy in this stock on the decline to Rs 220 for an upside target of Rs 245 keeping a stop loss of Rs 206.
Infosys | Rating: Buy around Rs 723 | Target: Rs 775 | Stop Loss: Rs 701| Upside: 7 percent
Infosys is trading with higher high & higher low formations in a rising channel since November 2018. Since higher time is trading with a positive bias, any correction can be used as an opportunity to buy. RSI is trading above 50 levels which is also supportive for upside movement. As long as prices are trading above Rs 701 levels, we recommended buying Infosys on the decline around Rs 723, for the target of Rs 775.
(The author is Head of Technical & Derivative Research at 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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