Nifty after a series of consolidation has managed to close decisively above the crucial hurdles of 8,700 on Wednesday which has confirmed a short term neutral trend into positive. Overall the market is in a bull structure trend and dips, if any, are an opportunity to initiate long positions at lower levels. It is essential for the Nifty to close above 8850 level for a positive bias and continuation of the uptrend. And any move beyond that may trigger a further upside till 9,150 and 9,500, which is a possibility over the next few weeks.
Bank Nifty has formed a bullish pattern on the daily charts as it has managed to close above its recent swing high which confirms a higher high formation and a short-term trend reversal. There is an immediate resistance at 19,900 levels on the upside and on a decisive close above expect rise to 20,300 & 20,550 levels.
IndusInd Bank and YES Bank: We expect outperformance from banking sector and our top picks are IndusInd Bank and YES Bank for an upside of 5-8 per cent from the current levels. Recently, the emergence of multiple bullish candles near this zone on the daily charts and these entire patterns indicate strength. This is also confirmed by the positive crossover in momentum indicators, which indicates continuation of rally.
Bajaj Auto: The auto sector is likely to outperform in the near the near term and particularly Bajajauto have confirmed a short-term trend reversal and resumption of the original uptrend. The stock recently observed breakout from its recent highs. The stock has been an outperformer in the markets as the RSC ratio has formed a higher high along with the price. The recent decline was corrective in nature as the prices have bounced from the oversold levels along with the reversal. The stock is likely to rally towards the new highs as the momentum indicators continue to remain positive.
Reliance Industries: Reliance Industries has confirmed a breakout and also confirms the uptrend as the indicator has managed to sustain above the 40 Bullish Support levels. The indicator has breached its recent highs confirming the bullish setup. The price has breached above the multiple rounding pattern along with sharp rise in volumes. There is an immediate resistance at 1080 and on decisive close above expect rise towards the 1200 levels.
(The author is Manav Chopra, CMT Head Technical Analyst at Monarch Networth Capital)