On the weekly chart, the Nifty index has formed a Bearish candle with a long lower shadow indicating buying at lower levels.
The index is also sustaining below its 'Up-Sloping Channel' breakdown, a level which signals downtrend on short to medium-term charts.
The chart pattern suggests that if Nifty crosses and sustains above the 11,080 levels then it would witness some pullback action which would lead the index towards the 11,150-12,250 levels.
However, if the index breaks below the 10,850 levels it would witness selling which would take the index towards the 10,800-10,730 levels.
The Nifty is trading below 20, 50 and 100-day SMA's which are important short term moving average, indicating negative bias in the short term.
The Nifty continues to remain in an uptrend in the long term, so buying on dips continues to be our preferred strategy. For the week, we expect Nifty to trade in the range of 11,280-10,850 with mixed bias.
The weekly strength indicator RSI and momentum oscillator Stochastic have both turned negative and are below their respective reference lines indicating negative bias.
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Infosys: Buy| LTP: Rs 775| Buying range Rs 760-770| Target: Rs 795-810| Stop Loss: Rs 750| Upside 4-6 percent
On the weekly chart, the stock price is sustaining above its breakout levels of Rs 755-760 on closing basis. This breakout has accompanied with an increase in volumes which supports bullish sentiments ahead.
The weekly strength indicator RSI and the momentum indicator Stochastic both are in positive territory which supports upside momentum to continue in the near term. The stock price is sustaining well above its 20, 50 and 100 day SMA which supports bullish sentiments ahead.
Pidilite Industries: Buy| LTP: Rs 1,265| Buying range Rs 1,245-1,265| Target: Rs 1,305-1,330| Upside 4-6 percent
On the daily chart, the stock price has decisively broken out from its 'Multiple resistance zone' levels of Rs 1,250-1,255 levels on a closing basis and is also sustaining above the same.
This breakout has accompanied with an increase in volumes which supports the bullish sentiments ahead. The daily, as well as weekly strength indicator RSI and the momentum indicator Stochastic both, are in positive territory which supports upside momentum to continue in near term.
The stock price is sustaining well above its 20, 50 and 100-day SMA which supports bullish sentiments ahead.
Avenue Supermarts: Buy| LTP: Rs 1,512| Buying Range Rs 1,470-1,490| Target: Rs 1,540-1,565| Stop Loss: Rs 1,440| Upside 4-6 percent
On the daily chart, the stock price has decisively broken out from its 'Multiple resistance zone' levels of Rs 1,475-1,485 on a closing basis and are sustaining above the same.
This breakout is accompanied with an increase in volumes which supports bullish sentiments ahead. The daily as well as weekly strength indicator RSI and the momentum indicator Stochastic both have turned positive which supports upside momentum to continue in the near term.
The stock price is sustaining well above its 20, 50 and 100 day SMA which supports bullish sentiments ahead.
(The author is Head Technical & Derivatives Research, Axis Securities)
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