Rohan Patil
Nifty traded in a rising channel pattern and tested its short and medium-term moving averages (21 and 50 -days EMA) on June 12.
The index registered a low and recovered sharply from the lower band of the upward rising channel.
On June 15, Nifty formed an inside bar pattern and since then it has not tested the low of that pattern.
In the last four trading sessions, volatility has increased drastically and we have seen that the market swings at least 100 points in both the directions.
Despite a volatile day on June 17, the market breadth remained in favour of bulls. India VIX gained by more than 1.35 percent and closed above 33 levels.
Technically, the benchmark index is bearish on the weekly and monthly timeframe.
On the daily scale, it has witnessed a stiff fall from the highs of 10,328 to 9,544 and it has also retraced more than 61.80 percent of the fall.
Till the time 10,050 is not broken, bulls will be under the shade. Once it successfully jumps above the hurdle, 10,550 will be on the cards which will be the upper band of the channel.
In case the index violates 9,700 level, a sharp decline will take place which could drag the index towards 9,400–9,300 levels.
Bank Nifty, on the other hand, is trading in a range of almost 4,000 points. For the last three trading days, the banking index has been trapped in a narrow range of approximately 600 points which is between 21 and 50–day exponential moving averages.
Despite the negative news regarding India–China border tension, Bank Nifty has still not filled the gap created on May 29.
Our outlook remains sideways to positive on Bank Nifty with higher targets of 21,800 for the coming weeks.
On the downside, initial support is placed at 19,350 which is supported by a common gap of May 29 which is still unfilled.
Here are three buy recommendations for the next 3-4 weeks.
Oil India | Buy | LTP: Rs 97.05 | Target price: Rs 105 | Stop loss: Rs 92 | Upside: 8%
After a prolonged consolidation, Oil India witnessed a triangle pattern breakout on the daily timeframe.
This week, the stock has given a consolidation breakout above the defined range with above average volumes.
Momentum oscillator RSI (14) is reading above 60 levels on the daily chart with positive crossover on the cards. However, prices are trading near its two weeks high, sustaining above its 21 and 50-days exponential moving average on the daily scale.
Traders can accumulate the stock in the range of Rs 96.70–97.20 for the target of Rs 105 with a stop loss below Rs 92 on a daily closing basis.
Aarti Industries | Buy | LTP: Rs 935.05 | Target price: Rs 1,040 | Stop loss: Rs 870 | Upside: 11%
Aarti Industries, on the daily chart, has witnessed a 'Falling Wedge Pattern' breakout, trading above its trendline support.
After the recent correction, the stock has formed a bullish engulfing candlestick pattern on the weekly timeframe.
This intermediate correction has found support near 61.80 percent Fibonacci retracement on the weekly interval.
Positive moving average crossover and short-term range breakout suggest that the stock is poised for a short-term rally.
RSI and other momentum indicators are trading in a positive zone. Traders can accumulate the stock in a range of Rs 933 – 938 for the target of Rs 1,040 with a stop loss below Rs 870 on a daily closing basis.
Adani Transmission | Buy | LTP: Rs 217.45 | Target price: Rs 250 | Stop loss: Rs 200 | Upside: 15%
This week, the stock prices have confirmed a price-volume breakout from the cluster of hurdles.
After a rectangle pattern breakout, the price seems to have picked up its momentum again.
Momentum oscillator RSI (14) is reading above 60 levels on the daily chart with positive crossover on the cards.
However, for the last few days, prices have been consolidating within a range of 21 and 50-day exponential moving average that is placed in a range of 200 and 185, respectively.
In the previous three trading sessions, the stock broke its moving average range on the higher side, which is positive for the counter.
The daily, as well as, the weekly chart look extremely promising and hence, we expect outperformance from the current level.
Traders can accumulate the stock in the range of Rs 216 -218 for the target of Rs 250 with a stop loss below Rs 200 on a daily closing basis.
(The author is Technical Analyst at Bonanza Portfolio)
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest business news, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
