F&O expiry: Nifty support at 16,500, Bank Nifty may hit 36,300; ICICI Bank, Cipla, others strong on charts

August 18, 2021 8:31 AM

On Wednesday, against the backdrop of the weekly expiration of index options, the Nifty would find resistance between the 16650 and 16700 levels

nifty, bank nifty, stock markets, icici bankThe Bank Nifty has seen a bullish reversal after moving to the lower limit of the trading zone between 35600 and 36300. Image: Reuters

By Shrikant Chouhan

In this week, post muted opening the market is hovering in the range of 16500-16580. However, the medium-term texture of the market is bullish. On Tuesday, the market remained weak in the first half of the trading session. But in the late afternoon, once again bulls took the charge, and due to strong buying interest markets cleared intraday resistance of 16590 and succeeded to close above the same which is broadly positive. Now we can see value buying in financial, cement, and capital goods companies.

On Wednesday, against the backdrop of the weekly expiration of index options, the Nifty would find resistance between the 16650 and 16700 levels. On the other hand, 16500 and 16450 would serve as a major support level for the short term. The Bank Nifty has seen a bullish reversal after moving to the lower limit of the trading zone between 35600 and 36300. Based on that, the Bank Nifty should move towards the 36300 levels.

Technical stocks to watch

Larsen & Toubro (L&T)
BUY, CMP: Rs 1,638.75, TARGET: Rs 1,720, SL: Rs 1,600

On a broader time frame, the stock has formed Higher Top and Higher Bottom series chart pattern which has resulted in strong uptrend, however, the recent price drop from its all-time high zone is retesting of the breakout region and its retracement zone hence the pullback rally is expected for further up move in coming sessions.

ICICI Bank
BUY, CMP: Rs 701.2, TARGET: Rs 735, SL: Rs 685

After hitting the high of 717 the counter witnessed a pause in momentum and it entered into a consolidation phase for the last few sessions, however currently, on intraday charts, it is trading in a Symmetrical triangle chart pattern which indicates that the counter has sufficient upside potential from the current levels.

Cipla
BUY, CMP: Rs 904.65, TARGET: Rs 950, SL: Rs 885

On the daily chart, the stock has reversed sharply from its double bottom support zone with a strong bullish candlestick formation, the rising volume activity near support area indicates a strong trend reversal from the current levels for bullish up move in the near term.

Ambuja Cements
BUY, CMP: Rs 401.5, TARGET: Rs 420, SL: Rs 393

Post correction from its all-time high of 427 the counter is trading in a narrow range with decent volume activity near its multiple support zone which suggests that the stock is getting bullish interest at the lower levels moreover the formation of a Hammer candlestick pattern also hints for strong reversal in the coming horizon.

(Shrikant Chouhan is Executive Vice President, Equity Technical Research at Kotak Securities. Views expressed are the author’s own.)

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