Shabbir Kayyumi Narnolia Financial Advisors
The market could not sustain the corrective bounce back for another week. The Nifty closed below its 5-DMA (10,465) suggesting weakness in benchmark index in the very short term.
As of now, Nifty has to sustain above 10,290 to avert any weakness. If this level is breached we will again see the index struggle to find a base around its previous lows and it can slip down to 10,200 and 10,100 levels.
Nifty witnessed resistance near 10,705. The gap above 10,740 will continue to provide resistance to the Nifty. Also, the downward sloping trend line on lower time frame is likely to provide resistance to prices around 10,626 in very short term.
In an immediate sense, a breakout is expected to come only above 10,520-10,540 zone from where it can extend up to 10,750 and 10,850. This view will be negated if it gets below 10,290.
A high Open Interest (OI) in Put is seen around 10,000 strikes followed by 10,200 strikes where the highest addition of OI is also seen, whereas maximum OI in Call at 11,000, followed by 10,600. Moreover, options data indicates an immediate trading range between 10,200 and 10,800.
10,200 on the Nifty is the trend decider as a close below 10,200 will push benchmark index towards 10,100 and swing bottom near 9,950.
Bank Nifty has a strong support near 25,000 psychological levels. Since last few sessions, the index is respecting this zone (24,800-25,000). Nevertheless, these immediate support levels should provide strong support, unless Bank Nifty decisively trades below it. We expect range-bound movement with a positive bias for coming sessions in a range of 26,000-24,800.
Coal India | BUY around Rs 276| Target: Rs 322| Stop Loss: Rs 254| Upside: 16.8 percent
Coal India has given falling channel breakout after giving short-term consolidation on the daily chart. From last few days, it has been trading in its congestion zone and formed head and shoulder pattern on the weekly chart and double bottom pattern which create buying opportunity in the scrip again.
Breakout is expected above Rs 295 from where it can increase its buying momentum. Moreover, indicators and oscillators are looking oversold which are giving cues for pullback on the upside. By looking all these factors, trader and investor can buy this scrip around Rs 276 with the stop loss Rs 254 for the target of Rs 322.
Axis Bank | BUY around Rs 560 | Target: Rs 650| Stop Loss: Rs 512| Upside 16.1 percent
Axis Bank is running in the upward sloping channel. After hitting the peak of Rs 677, it showed a sharp decline towards Rs 545-550. It took support as point of polarity is seen near Rs 555 which signalled halt in the downswing.
Currently, the stock is trading above its 200 DMA which comes at Rs 556 and this shows a positive trend in the scrip. Based on the above technical structure, we are expecting an upside momentum in the stock in coming sessions. Buy around Rs 560 for the target Rs 650 level, keeping a stop loss of Rs 512.
Glenmark Pharma | BUY around Rs 585 | Target: Rs 660 | Stop Loss: Rs 548 | Upside: 12.8 percent
Glenmark Pharma is taking support from its upward sloping line and currently it is hovering above its downward falling sloping line from where firm support is seen. Parity on the weekly chart is showing possibility of a bounce back on the upside. Moreover, declining peak of MACD histogram is also showing upside momentum.
Sustainability of RSI above 50 on the weekly chart is giving cues of positive momentum on the upside. Strong support is seen near 200 DMA which comes at Rs 548. One can take long position in the stock at Rs 585 with stop loss of Rs 548 for the target of Rs 660.
Future Retail | BUY around Rs 490 |Target: Rs 550| Stop Loss: Rs 458| Upside: 12.2 percent
Future Retail rebounded from a low of Rs 779 and started showing pullback on the upside. This bounce-back rally and contraction formed pole and flag price pattern in the last few days. Currently, it is waiting for the breakout on upside where buying momentum is expected to accelerate further.
Positive crossover on daily chart suggests bulls can take a charge. Indicator and oscillator are also showing a favorable scenario in the coming sessions. So based on the mentioned technical structure we expect that price may see a rally on upside till Rs 540- 560. Buy around Rs 490 with stop loss of Rs 458 for the target of Rs 550.
Lupin | BUY around Rs 875 | Target: Rs 970| Stop Loss: Rs 830| Upside: 10.9 percent
After hitting the peak of Rs 711, Lupin slipped lower at Rs 574 then it turned back after forming a congestion zone on the lower time frame of charts. As of now, it is retesting its falling trend line on weekly chart which is showing stability in the stock.
Declining histogram in MACD along with positive crossover below the central line is creating optimism in coming sessions. Key support level is located near Rs 842 where 200 DMA is seen. As long as it sustains above Rs 830, the possibility of moving on the upside is higher and it can hit our target of Rs 970 with an ease.
Disclaimer: The author is Head - Technical & Derivative Research at
Narnolia Financial Advisors. 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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