Currently, the Nifty is trading near its previous resistance level and on the intraday chart it has formed lower top formation which suggests temporary weakness
By Shrikant Chouhan
After a sharp pullback rally from 14415/48720, benchmark indices hovering in the range of 14750 to 14950/ 49600-49000. Currently, the Nifty is trading near its previous resistance level and on the intraday chart it has formed lower top formation which suggests temporary weakness. However, the larger texture of the market is still bullish and likely to continue in the medium term. Technically, if indices succeed to trade above the 50 day SMA or 14700/48500 level then uptrend formation will continue up to 15000/ 49500. Further upside may also continue which could lift indices till 15200/ 50600. However, dismissal of 14700/ 48500 could trigger further weakness up to 14600-14500/48200-47950.
- DMart’s Avenue Supermart, Naukri.com’s Info Edge shares may enter Nifty 50 soon; Indian Oil may exit
- Stocks to buy: 15,670-15,800 key trading area for Nifty, F&O expiry major trigger; TCS, Tata Motors may rally
- SGX Nifty moves up 68 pts, Sensex, Nifty may open in green; India Pesticides IPO, among key things to watch
Technical stock picks
For the last two months, the stock has been in a downward channel after hitting the all-time high at around 425, however it managed to bounce back from its key retracement zone and currently forming an Ascending Triangle chart formation where it seems that breakout is likely to occur from its resistance line.
BUY, CMP: Rs 1,029.65, TARGET: Rs 1,080, SL: Rs 1,000
Post decline from the highs of 1230, the stock has formed a strong base in its multiple support area of around 1000, meanwhile a positive crossover in Stochastic near support and a breakout of the short-term sloping trend line on the daily chart indicates a new leg of bullish movement in the counter.
BUY, CMP: Rs 1,368.45, TARGET: Rs 1,440, SL: Rs 1,340
On a broader time frame chart, it is evident that the stock has a strong demand zone in the 1300 and 1400 range where earlier it has formed a drop, base, and rally formation. Recently a Cup and Handle pattern on the daily chart can be seen hence strong upside is expected from the current levels.
Power Grid Corporation of India
BUY, CMP: Rs 223.4, TARGET: Rs 235, SL: Rs 216
The stock is trading into an Ascending Triangle chart pattern with incremental volume activity on the daily chart, additionally, all major technical trend indicators such as Stochastic and ADX are strong and intact. Thus breakout up move from the current level is very likely to occur in the near term.
(Shrikant Chouhan is Executive Vice President (Equity Technical Research), Kotak Securities. Views expressed are the author’s own.)