Buy these 2 stocks for gains while Nifty may correct after strong up-move; support at 17100-16900

In the past seven trading days, Nifty has witnessed two gaps up opening without any correction and both the gaps are unfiled. So there are chances prices may give a throwback towards those levels.

Buy these 2 stocks for gains while Nifty may correct after strong up-move; support at 17100-16900
The immediate support for the Nifty is placed at 17100 and below those 16900 levels.

By Rohan Patil

The Benchmark index closed in green for the third straight week and prices are sustaining above its 21 — exponential moving average which is placed at 16616 levels. On the daily chart of August 4, prices have formed a hanging man candle stick pattern and on the immediate next day, price traded within the range of the previous day’s candle.

The momentum oscillator RSI (14) is reading in a higher high higher bottom formation from the 30 levels and has reached near its overbought zone which is 70 levels and the slope of the oscillator has started to move lower like an inverted scallop pattern on the daily time frame.  

The distance between the 21 EMA which is placed at 16771 and prices have increased and we may find a corrective move to reduce the distance between this. In the past seven trading days, Nifty has witnessed two gaps up opening without any correction and both the gaps are unfiled. So there are chances prices may give a throwback towards those levels.

Also Read: Nifty needs to breach 17500 for bulls to rally; 5 things to know before opening bell

The immediate support for the Nifty is placed at 17100 and below those 16900 levels. The upside resistance is capped near 17600 and 17800 levels.

Bank Nifty edges higher

The Bank Nifty closed with gains for the third straight week and prices are now sustaining above its 21 — exponential moving average which is placed at 35700 levels. On the daily chart, Bank Nifty has formed a BEARISH SHARK HARMONIC PATTERN and prices are trading near PRZ levels. The prices have also formed a bearish engulfing candle stick pattern on the daily scale.

Also Read: Asian markets face subdued open as US futures drop; traders see greater odds of another 75 bps Fed rate hike

The momentum oscillator RSI (14) is reading in a higher high higher bottom formation from the 30 levels has reached near its overbought zone which is 70 levels. On the daily chart banking index is trading in a higher high higher bottom formation. And after a recent rise in the prices index has completed its higher high formation and an immediate throwback is pending.

The immediate support for the Bank Nifty is placed at 37000 and below those 36500 levels. The upside resistance is capped near 38300 & 38500 levels.

Dr Lal Pathlabs: BUY
Target: Rs 2565 | Stop Loss: Rs 2329
Return: 5.68%

The prices witnessed an ascending triangle pattern breakout on July 29 which was placed above 2250 levels on the daily time frame. Post breakout prices are showing a gradual upside movement in the formation of a small steep.

The prices are also sustained above its 21, 50 & 100 – day exponential moving average which is placed at 2213, 2198, 2346 levels. The counter is also trading near the upper band of the Bollinger band indicating a possible continuation of the uptrend after the recent consolidation. Momentum oscillator RSI (14) has given a trend line breakout which is placed at 60 levels with bullish crossover on the daily time frame. MACD indicator has crossed above its line of polarity.

TCS: BUY
Target: Rs 3550 | Stop Loss: Rs 3230
Return 05.50%

The prices witnessed a falling channel pattern breakout on July 28 which was placed above 3240 levels on the daily time frame. Post breakout prices are moving higher without any pause which indicates a strong momentum in the ongoing trend.

The prices are also sustained above its 21 & 50 -day exponential moving average which is placed at 3241 & 3266 levels. The counter is also trading near the upper band of the Bollinger band indicating a possible continuation of the uptrend after the recent breakout. Momentum oscillator RSI (14) has given a trend line breakout which is placed at 52 levels with a bullish crossover on the daily time frame. MACD indicator has crossed above its line of polarity.

(Rohan Patil is a Technical Analyst at Bonanza Portfolio. The Views expressed are the author’s own. Please consult your financial advisor before investing.)

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