Technical stocks to buy: Tata Power, UBL show further rally on charts; check Nifty support, resistance levels
April 7, 2021 8:49 AM
Wednesday is an important day for the market and a level based trading approach should be followed. For the Bank-Nifty, 32250 and 32700 should be the trading range
On a daily basis, the market has formed an indecisive pattern and based on that upward activity is not ruled out. Image: Reuters
By Shrikant Chouhan
Tuesday was a volatile trading day. If we calculate the intraday variation, the Nifty/Sensex moved up and down by 750/2200 points. On a daily basis, the market has formed an indecisive pattern and based on that upward activity is not ruled out. On that basis, levels of 14790/49600 and 14820/49700 will be important. If the level of 14820/49700 is decisively crossed, the Nifty/Sensex can jump up to 14950/50100. If it goes below 14540/48800, then the Nifty could drop to 14450/48550 and 14350/48350 levels. Wednesday is an important day for the market and a level based trading approach should be followed. For the Bank-Nifty, 32250 and 32700 should be the trading range. Expect trending activity above and below the given levels. Be stock specific in the market.
The stock had shown a phenomenal up move from the levels of 70 till 114 without any significant correction however 114 becomes the obstacle due to double top kind of a formation which resulted in a price drop, nevertheless recent range bound movement with incremental volume points at good accumulation by bulls for the continuation of an uptrend.
In the past last three months, the stock was trading in a rectangle formation forming a strong base for the counter, subsequently, a fresh breakout with a strong bullish candlestick pattern along with pick up in volume indicates a new leg of upward movement in the near term.
On the weekly scale, the stock was into a sloping channel after making the highs of around 500, eventually, its downward move stopped near the multiple support zone of 420 and the strong rebound is seen in the counter with an increase in volume activity, recent trend line breakout confirms bullish momentum to remain in the coming time horizon.
After the remarkable up move from the levels of 900 till 1320, the stock faced multiple resistance into the supply zone of 1300-1320. As a result, we observed a substantial drop in the share price. Nevertheless, it seems that the worst is behind as the stock is near to its important Fibonacci retracement zone. Hence we expect a strong up move from current levels.
(Shrikant Chouhan is the Executive Vice President, Equity Technical Research at Kotak Securities. Views expressed are the author’s own.)