By Nagaraj Shetti
The choppy movement continued in the market on Wednesday and NSE Nifty 50 closed the day lower by 32 points amid volatility. After opening with a positive note, the market has started with upside recovery since opening. The gradual up move continued for the better part of the session and selling pressure has emerged from the highs towards the end. The opening downside gap has been filled completely.
A long bull candle was formed on the daily chart after opening lower. This is the back to back second such pattern in the last two sessions, which signal range bound movement in the market. After the false upside breakout of 15800-15900 levels on Monday, Nifty has declined gradually in the last two sessions, which could be a positive indication for the bulls to make a comeback from the lows. Normally, such range movements from near important resistances eventually results in a sharp upside bounce from the lows.
Minor degree of positive sequence like higher tops and bottoms is intact on the daily chart and current weakness could be in line with the formation of a new higher bottom of the sequence. There is no confirmation of any higher bottom reversal as of now.
The short term trend of Nifty continues to be choppy with negative bias. The present range bound movement in Nifty could continue for the next 1-2 sessions and immediate support to be watched around 15600-15650 levels. On the flip side, a decisive move above 15850-15900 levels is likely to open a sustainable upside for the market.
The down trend of the last three weeks seems to have reversed up in this textile stock (Raymond) as per weekly time frame chart. The formation of a negative candle with long lower shadow of last week and a sustainable upside bounce so far indicate a near term bottom reversal for the stock price around Rs 796.55. The larger degree of positive sequence like higher tops and bottoms is intact and the stock price has sustained above the immediate support of weekly 10 and 20 period EMA. Weekly 14 period RSI shows positive indication.
Buying can be initiated in Raymond at CMP (907.80), add more on dips down to Rs 880, wait for the upside target of Rs 1005 in the next 3-4 weeks. Place a stop loss of Rs 850.
Sell Titan Company July Future
The stock price (TITAN) has been in a sharp downtrend over the last few months. We observe a formation of negative sequences like lower tops and bottoms over the period of time. An attempt of an upside bounce of last week has been reversed with a decline so far this week. Volume has started to expand during stock prices’ downward movement. Weekly 14 period RSI has been sloping down around 40 and is expected to break below it. Hence, one may expect continuation of downside momentum in the stock price ahead.
One may look to Sell Titan July Future at CMP (Rs 1933.45), add more on rise up to Rs 1985 and wait for the downside target of Rs 1760 in the next 3-4 weeks. Place a stoploss of Rs 2035.
(Nagaraj Shetti, Technical Research Analyst, HDFC Securities. Views expressed are the author’s own.)