By Rohan Patil
Nifty 50, the benchmark index, on the weekly chart has formed a bearish evening star candlestick pattern and has drifted below 17500 levels with a loss of more than one and a half per cent. From the second week of October 21, momentum oscillator RSI (14) is reading in a lower low lower high formation on the weekly time frame indicating a lack of momentum in the current trend.
MACD indicator has given an early reversal signal on the daily chart by crossing below its signal line on the daily scale. The higher high higher low formation on the Nifty will be neglected if prices closed below 17300 levels.
India VIX on the daily time frame continues to settle below 21- DMA and it is also placed below 20 levels in the last couple of days. A VIX index drifting lower is definitely a good sign for the traders as will be less volatility and a stable move. After last week’s close, on the lower end, support is visible at 17300 – 17150 whereas resistance is seen at 17,850-17,950.
It was a narrow range truncated week for the Bank Nifty where we got only three trading sessions and prices witnessed very narrow range movement amid volatility. Chart-wise we have not seen much technical progress on the weekly time frame where it just closed marginally below its previous week’s candles.
For the entire week, prices continue to trade above their 21–day exponential moving average which is placed at 36921 levels. Currently, prices on the weekly chart have halted near the resistance of a downward sloping trend line.
The momentum oscillator RSI (14) has given a horizontal trend line breakout above 55 levels and the indicator has retested in this recent throwback near its trend line support.
The immediate support for the Bank Nifty is placed near its 21 DMA which is placed at 36900 levels and the upper band of the index is capped at 38700 levels if the Banking index is closed above the said levels then the gate for the prices is open till 39400 levels.
GLENMARK PHARMACEUTICALS: BUY
Target: Rs 509 | Stop Loss: Rs 460
From the last one and half months prices have formed a basing formation and in terms of classic technical stock has formed a bullish cup & handle pattern on the daily interval.
On the 5th April prices have given a decisive breakout above its trend line resistance which is also a breakout of a cup and handle pattern at 470.15 levels. The breakout was followed by an above average volume and prices successfully closed above its 21- day exponential moving average on the daily time frame.
The majority of indicators and oscillators are also in bullish range shift mode and reading above its line of polarity.
RAMCO CEMENT: BUY
Target: Rs 877 | Stop Loss: R. 775
After forming a bullish ABCD harmonic pattern on the daily chart prices consolidated in a triangle pattern for more than a month and traded within a very narrow range. On April 5 prices have given a decisive breakout above its trend line resistance which is also a breakout of a triangle pattern at 802 levels with above average volumes.
On the broader time frame prices have also given a breakout above their five-week high and RSI (14) has shown a sharp bounce back from oversold 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.)