Nifty forming bullish pattern, resistance at 15900; Buy these two stocks for gains

The support for the Nifty is placed near 15200 levels and if prices close below the same then the previous year’s low will be tested which is placed near 14800 levels.

The support for the Bank Nifty is placed near 32600 levels and if prices close below the same then 31000 will be the next level to watch out for.

By Rohan Patil

The Nifty 50 index has formed a bullish ABCD harmonic Pattern at 15350 levels and currently prices are trading marginally above their PRZ (potential reversal zone) on the weekly time frame. Last week we saw a decent pullback in the prices after a consecutive negative closing on the weekly closing basis. In terms of candle sticks, prices have formed a bullish harami pattern on the weekly chart. The harami pattern requires a bullish confirmation by closing above the pattern in the coming weeks; if we do not get any confirmation, we may see this pattern’s failure.

The prices from the last two weeks were closing below its 200 – week exponential moving average but due to a strong pullback in the last two days prices have closed above its 200 EMA which is placed at 15467 levels.

On the indicator front, momentum oscillator RSI (14) is forming lower bottom since October 2021 and continues to follow the same. Currently, RSI is settled near 40 levels on the weekly time frame with a bearish crossover.

The support for the Nifty is placed near 15200 levels and if prices close below the same then the previous year’s low will be tested which is placed near 14800 levels. On the higher side, the immediate resistance for the index is placed at 15900 levels and above those 16200 levels.

Bank Nifty forming bullish pattern

After trading in a bear shade for more than three weeks Bank Nifty witnessed a strong pullback and close above 33500 with a gain of more than two and half percent of the weekly closing basis.

In terms of candle stick prices have formed a bullish harami pattern on the weekly chart. The harami pattern requires a bullish confirmation by closing above the pattern in the coming weeks; if we are not getting any confirmation then we may see a failure of this pattern.

Despite this short-term rally prices are still trading below their (21, 50 & 100) – day exponential moving average on the daily chart. The momentum oscillator RSI (14) after forming a double bottom pattern on the daily chart near 30 levels has shown enough strength to close above the 40 levels with positive crossover on the daily scale.

The support for the Bank Nifty is placed near 32600 levels and if prices close below the same then 31000 will be the next level to watch out for. On the higher side, the immediate resistance for the index is placed at 34300 levels and above those 34900 levels.

IPCA Laboratories: BUY
Target: Rs 945 | Stop Loss: Rs 850
Return: 6%

IPCALAB on the daily chart has given a consolidation breakout on 21st June and prices have formed an accumulation phrase near 850 levels. In this recent rally prices have closed above its 21 – day exponential moving average on the daily time frame.

In terms of candle stick prices have formed an inverted hammer bullish reversal pattern and prices have completed a basing formation near the lower level of the pattern on the weekly time frame.

Momentum oscillator RSI (14) witnessed a sharp reversal from the oversold levels and since then was hovering within the 30 – 40 levels. Recently the RSI has also witnessed a range breakout above 40 levels with positive crossover on the daily time frame.

Birlasoft: BUY
Target: Rs 380 | Stop Loss: Rs 347
Return: 5.20%

The stock has completed a bullish ABCD Harmonic pattern at 320 levels and currently, prices are trading within its PRZ (potential reversal zone) on the weekly time frame.

This week prices have closed above the previous week’s close and prices have completed a basing formation near the lower level of the pattern on the weekly time frame.

The momentum oscillator RSI (14) is showing a positive divergence at oversold levels and has sustained above 35 levels. Furthermore, prices have completed its 50% retracement from the March 2020 low.

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

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