Shabbir Kayyumi
Bulls dominated the D-Street in throughout November as they continue to push the index higher above life high.
Nevertheless, after retracing from a record high, Nifty closed in 100 points of losses on the last trading session as profit booking is witnessed at higher levels.
Although Index has formed long body bearish candlestick pattern on the daily time frame, the overall structure looks promising which is indicated by strong bullish candlestick pattern on the weekly time frame. The index has managed to close above the previous week’s high also suggests bulls on active on the lower side.
Weekly RSI trading is trading above 50 marks also suggests bullish bias to continue in mid-term whereas prices are moving in a rising channel and the upper trend line of the channel comes near 12,400 marks which can act as a profit booking levels further.
Bulls will continue to cheer this rally of the index by pushing Nifty towards a new high. At the same time, a decisive close above 12,150 marks will open gates of the new zone which can be easily extended towards 12,400 levels whereas lower side supports lies around the line of parity standing at 11,800 marks.
Interestingly, Nifty has seen 79 percent of rollover on November 28, which is marginally less than the last series rollover data (84 percent). At the same time, current rollover is almost equal to three-month average of 79 percent and six-month average of 76 percent whereas Bank Nifty has seen a strong rollover of 70 percent in November 2019 expiry week, which is the higher than last expiry data by almost 10 percent.
The banking index has managed to close above life high (31,783) and near major psychological levels of 32,000 indicating strong strength in current up move. As long as banking index sustains above 31,000 marks, it can extend higher towards 33,000 levels provided by Fibonacci extension. Moreover, trading range for banking index will be 30,800-33,000 for the coming week.
Trade recommendation
Balrampur Chini Mills | Rating: Buy around Rs 150 | Target: Rs 177 | Stop Loss: Rs 133 | Upside: 18 percent
This stock is currently trading in an uptrend and respecting the successive peak and trough formation on the weekly chart. A pullback would offer a good opportunity to enter at swing low for a ride within the larger time frame.
The RSI reading of 59 shows positive momentum indicating the strength in a trend. The momentum indicator MACD has crossed the signal line indicating a start of a trend. However, we recommend buying in stock around Rs 150 with a stop loss of Rs 133 and aim for a target of Rs 177.
NCC | rating: Buy around: Rs 58 | Target: Rs 68 | Stop Loss: Rs 51 | Upside: 17 percent
On the weekly chart, stock has given breakout from its inverted H&S pattern and currently it is retesting the neckline of the same. On the daily and weekly chart, the stock has witnessed shift of trend to the upward forming a series of higher tops and higher bottoms.
The weekly strength indicator RSI and the momentum indicator stochastic are in positive territory which supports bullish bias. It is also sustaining well above its 20 and 50 DMA which support bullish sentiment ahead, hence we recommend a buy NCC around Rs 58 with a stop loss of Rs 51 and aim for a target of Rs 68.
Punjab National Bank | Rating: Buy around: Rs 65 | Target: Rs 75 | Stop Loss: Rs 59 | Upside: 15 percent
The stock is undergoing a consolidation in the longer time frame and is on the verge of resuming its prior trend from the polarity area of support while forming inverted H&S pattern. The momentum indicator MACD has crossed the signal line indicating a start of a trend.
The RSI too is above its key 50 mark indicating positive momentum on its side. A pause at the area of polarity suggests significant rebound is likely and hence we recommend buying PNB around Rs 65 with a stop loss of Rs 59 and aim for a target of Rs 75.
(The Author is Head - Technical & Derivative Research, Narnolia Financial Advisors)
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