Chart pattern indicates Nifty50 can move upward 10,550-10,700 level in the near to short-term, while 10360- 10250 are likely to act as a tough support level for the index in the near term, Rajesh Palviya, Head – Technical & Derivatives Analyst, Axis Securities, said in an exclusive interview with Moneycontrol’s Kshitij Anand.
Q) The Nifty closed above 10450 on Friday and closed the week on a bullish note. What is the way ahead and how markets looking on the weekly and daily charts?
A) The Nifty50 have a strong bullish setup on the weekly and daily chart. It continues to form the higher top and higher bottom formation on the daily and weekly charts which indicates sustained uptrend.
On the Weekly and Daily chart, strength indicators such as relative strength index (RSI) and MACD is in a positive territory which suggests bullish bias ahead.
The Nifty is very well placed above all its important moving averages supports which indicates bullish bias ahead. The index has formed a strong bullish candle on the weekly chart which indicates sustained buying in the market.
In the last week, the index has formed a bullish gap area in the range of 10367-10385 which is likely to act as a support for any minor corrective action in near term.
Chart pattern indicates Nifty50 can move upward 10,550-10,700 level in the near to short-term, while 10360- 10250 are likely to act as a tough support level for the index in the near term.
Q) What should be the strategy - buy on dips or sell on rallies in November?
A) Buy on dips would be our preferred strategy in the market. Chart patterns indicate that on the lower side if Nifty corrects towards 10360-10250 it is a buying opportunity.
The derivative data also indicates that 10300 and 10200 Put has witnessed aggressive writing throughout the week, while 10500 CE followed by 10700 CE seen highest OI buildup
Broadly, we can witness the 10300-10700 range for the month of November.
Q) Any stocks which are looking attractive at current levels based on technical?
A) Looking at the sector indices such as Power, Infra, PSU, Pharma, and Realty sector managed to give fresh breakout after a long consolidation on the monthly charts which suggests these sectors are likely to perform in near/short term.
One can buy stocks from these sectors for 10-15% upside in the near/short term.
Few stocks which are looking attractive on technical setup for 5-10% upside in the near to short terms are Aurobindo Pharma, L&T, Karnataka Bank, Indian Bank, REC Ltd, NTPC, DLF, Sun TV looks attractive on technical setup.
Aurobindo Pharma: CMP 788| Target Rs840| Stop Loss 765| Return 7%
The stock managed to give a breakout from its Head and shoulder formation on the daily chart at Rs775 level pattern breakout which indicates that stock can scale up towards Rs825-840 in the short term.
Strength indicator such as RSI and momentum oscillators are in a positive territory which indicates bullish is likely continue further. Traders can look at buying the stock in the range of 788-780 with a stop loss placed at Rs765 and a target of Rs825-840.
L&T: CMP Rs1246| Target Rs1305| Stop Loss Rs1210| Return 5%
On the daily chart, the stock is moving in a higher Top high Bottom formation and is currently poised for "Cup and Handle" formation breakout at Rs1250 levels.
The stock is sustaining above all its important moving averages 20, 50 and 100-days SMA which supports strength ahead. The daily and the weekly strength indicators and momentum oscillator Stochastic are in a bullish territory. Traders can buy in the range of Rs1245-1235 with a stop loss of Rs1210 and a target of Rs1305.
SUN TV: CMP Rs881| Target Rs915| Stop Loss Rs855| Return 4%
In the last week, the stock has decisively broken out from its four months multiple resistance zone of 862 level on the weekly closing basis along with high volumes.
On the daily and weekly charts, the stock is continuously forming a higher Top and higher Bottom formation which indicates sustained strength. Traders can buy in the range of 880-885 and a stop loss of Rs855 and a target of Rs915.
REC LTD: CMP Rs179| Target Rs200| Stop Loss Rs170| Return 12%
The stock has witnessed the corrective action in the recent past from Rs224 to Rs147 level. The stock has shown accumulation at a lower level and managed to close above 38% retracement level on weekly chart from its bottom.
The weekly and the daily strength indicator turned positive from an oversold zone which indicates stock may exhibit further bullishness in the near/short term.
We expect the stock will continue its pullback action up to 200 -205 level in coming weeks. Traders can buy in the range of Rs179-175 with a stop loss below Rs170 and a target Rs195-200.
Arvind Ltd: CMP Rs441| Target Rs465| Stop Loss Rs428| Return 5%
The stock managed to give a breakout of its broad consolidation range of 425-355 on the weekly and the monthly chart with high volume.
The chart pattern suggests that the stock likely to continue its bullishness and it can scale up towards 460-470 level in coming weeks.
The strength indicators are in positive territory supports bullish bias. Traders can buy in the range of Rs441- 435 with a stop loss below Rs428 and a target of Rs465.
Q) What is your call on NiftyBank?
A) The NiftyBank managed to give a breakout of its broad consolidation range (25190 – 23600) of the last three months. Looking at the chart pattern, NiftyBank is likely to exhibit its bullishness and it can scale up towards 25850-26200 in coming weeks.
PSU Banks are looking attractive at current juncture and we can expect 5-10% upside in PSU banks. From PSU Banks SBIN, PNB, BOB, Indian Bank are looking attractive for short-term upmove, while ICICI Bank, HDFC Bank, and Karnataka Bank look attractive.
Overall NiftyBank is likely to behave in a bullish manner in near/short term any dip towards 25400-25200 levels is buying opportunity in banking space.
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