By Rohan Patil
Last week was a super bullish week for the Indian bourses where the Nifty 50 index rallied more than 500 points gaining close to 5 % to close above 16650 levels. After 14 weeks the benchmark index has closed above its 21 & 50–week exponential moving average on the weekly chart and this can be a sign of an intermediate bottom for the index. Prices have witnessed two gap-up openings and both the gaps are unfilled creating strong support for the index. Currently, the benchmark index is closed above its 21, 50 & 100–day exponential moving average and the closest average support is 100 DEMA which is placed at 16440 levels.
Earlier the benchmark index had formed a bearish harami candle stick pattern on the weekly chart. And in this current week prices have crossed above the high of the pattern which confirms a failure of the bearish pattern which is positive for the index. And after a long time, we have seen positive FII & DII data for this particular week which is again favourable for the market.
The Nifty has crossed above some of its important hurdles and it will be interesting to watch for the next resistance levels which are placed at 16700 & 16800 levels. The immediate support for the Nifty is placed at 16350 & 16200 levels.
Will Bank Nifty continue to outperform?
The Bank Nifty as expected outperformed the Benchmark index and witnessed a breakout of an ascending triangle pattern on the weekly time frame. The banking index rallied more than 5 per cent for the week and closes above its 12-week high which was above 36000 levels.
Since 29 Oct 21, Bank Nifty was trading under the resistance of downward sloping trend line on the weekly chart. Prices in this particular week witnessed a strong breakout above the trend line resistance and closed above the same. Momentum oscillator RSI (14) on the daily chart has formed a perfect higher bottom formation from 30 levels and is still continuing to move higher above 60 levels with positive crossover on the cards.
The Bank Nifty has crossed above some of its important hurdles and it will be keen to watch for the next resistance levels which are placed at 38000 & 38600 levels. The immediate support for the Bank Nifty is placed at 35800 & 35500 levels.
Jubilant Foodworks: BUY
Target: Rs 615 | Stop Loss Rs 557
The prices witnessed a falling wedge pattern breakout on the daily chart and post that prices continued to trade higher and crossed above its important resistance zone. From the last four days prices have completed the throwback of the pattern near its 21 – day exponential moving average which is placed at 554 levels on the daily scale.
On the 20th July, prices again resume its upward journey after taking the support of its important averages and trading in a higher bottom formation. Momentum oscillator RSI (14) is reading in a bullish range shift zone and has found continuous support from the 50 levels.
The prices are also sustained above its 21-day exponential moving average. The counter is also trading near the upper band of the Bollinger band indicates a possible continuation of the uptrend after the recent consolidation.
Target: Rs 3357 | Stop Loss Rs 3054
After a sharp fall, the MINDTREE consolidated in a narrow range of 2700 – 3000 for almost two months and formed a rectangle pattern on the daily time frame. The prices have also formed bullish ABCD harmonic pattern and currently trading above its PRZ levels.
In the recent up move prices witnessed a strong breakout of the rectangle pattern on 20th July and sustained above the pattern. Stock is trading above its 21 & 50- day exponential moving averages on daily time frame, which is positive for the prices in the to the short to medium term.
MACD indicator is reading above its centerline with positive crossover above its signal line. Momentum oscillator RSI (14) on the daily chart has given a trend line breakout which is placed near 50 levels with positive crossover.
(Rohan Patil is a Technical Analyst at Bonanza Portfolio. The views expressed are the author’s own. Please consult your financial advisor before investing.)