By Nagaraj Shetti
Nifty continued with follow-through weakness on Wednesday amidst volatility and closed the day lower by 104 points. A long negative candle was formed on the daily chart with lower shadow. Technically, this pattern signals short term reversal in the market on the downside. After the formation bearish engulfing pattern on Tuesday, the market seems to have declined with follow-through action post bearish pattern.
Immediate support has been broken on the downside at 18,250 levels and the Nifty is now sliding down to another crucial support of 20 day EMA around 18,050 levels. The positive chart pattern like higher tops and bottoms continued as per daily timeframe chart. The recent swing high of 18,458 of 15th May could be considered as a new higher top of the sequence. The present weakness could be in line with another higher bottom formation at the lows.
The short-term trend of NSE Nifty 50 continues to be negative. We expect this weakness to continue for the next 1-2 sessions before showing upside bounce from the lows. The next crucial support is placed around 18,050-18,000 levels.
Transport Corporation of India
CMP: Rs 675 | Buy
The stock price (TCI) has witnessed a decisive upside breakout of larger consolidation pattern (type of symmetrical triangle pattern at Rs 635) in last week and closed higher. After a small range movement, the stock price is now ready to head higher. Daily RSI has turned up from above 60 levels, which is indicating strengthening of upside momentum in the stock price.
Buying can be initiated in TCI at CMP (Rs 675), add more on dips down to Rs 650, wait for the upside targets of Rs 735 and Rs 790 in the next 3-5 weeks. Place a stoploss of Rs 630.
CMP: Rs 500.10 | Buy
The brokerage company’s stock price (ISEC) seems to have shifted into a bullish flag type pattern recently after a sharp upside movement of the last few weeks. This could be considered as an uptrend continuation pattern. Currently, the stock price is in an attempt of upside breakout of the pattern at Rs 507 levels. The overall long-term chart signal formation of crucial bottom reversal in March at Rs 416.30 and subsequent decisive upside breakout of the resistance of significant down trend line at Rs 470 levels in the last week.
One may look to buy ICICI Securities at CMP (Rs 500.10), add more on dips down to Rs 480 and wait for the upside targets of Rs 545 and Rs 590 in the next 3-5 weeks. Place a stoploss of Rs 465.
(Nagaraj Shetti, Technical Research Analyst, HDFC Securities. Views expressed are author’s own. Please consult your financial advisor before investing.)