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#39;Nifty likely to be in uptrend, may face resistance around 11,600#39;

March 19
14:56 2019

Rajesh Palviya

On the weekly chart, Nifty has formed a long bullish candle forming higher high-low compared to the previous week and has closed above the previous week’s high indicating positive bias.

Nifty has broken its 5-month consolidation range of 11,100-10,600 that indicates strength in the near term. The index is moving in a higher top and higher bottom formation on the weekly chart indicating positive bias.

The chart pattern suggests that if Nifty crosses and sustains above 11,500 it would witness buying which would lead the index towards 11,650-11,800.

Derivative data also suggests that Nifty base is shifting higher and 11,400 strikes witnessing unwinding in 11,400 CE with subsequent addition in 11,400 PE, which indicates that the index has a limited downside to 11,400 in the near term.

On the higher side, 11,500 and 11,600 have witnessed significant Call writing and has Open Interest of approx 25 lakh share that indicates Nifty may face some resistance around 11,500-11,600 zone but once Nifty manages to cross 11,500-11,550 then we may witness short covering that could lead the index to a new high.

Nifty continues to remain in an uptrend in the medium term, so buying on dips continues to be our preferred strategy.

Here are the top stock trading ideas that can give good returns in the near term:

Sundaram Finance: Buying range Rs 1,600-1,570 | Stop loss: Rs 1,538 | Target: Rs 1,653-1,680 | Upside: 4-6 percent

On the weekly chart, the stock price has decisively broken out its consolidation range of Rs 1,500-1,340 on a closing basis and is sustaining above the same. This breakout is accompanied by rising volumes that supports bullish sentiments ahead.

The stock has witnessed a shift of trend to the upside since the past couple of weeks that indicates a positive bias. The weekly and daily strength indicator RSI and the momentum indicator Stochastic, both are in positive territory that supports upside momentum to continue in the near term.

The stock price is sustaining well above its 20, 50 and 100-day SMA that supports bullish sentiments ahead.

Bharat Electronics: CMP: Rs 94.75 | Buying range Rs 93-90 | Stop loss: Rs 87 | Target: Rs 97-101 | Upside: 6-10 percent

On the weekly chart, the stock has formed a double bottom pattern and has given a breakout on the closing basis. This breakout is accompanied with an increase in volumes which supports bullish sentiments ahead.

The weekly and daily strength indicator RSI and the momentum indicator Stochastic both are in positive territory which supports upside momentum to continue in the near term. The stock price is sustaining well above its 20, 50 and 100-day SMA that supports bullish sentiments ahead.

Bajaj Auto: CMP: Rs 3,026 | Buying range Rs 3,010-2,970 | Stop loss: Rs 2,930 | Target: Rs 3,110-3,140 | Upside: 4-5 percent

On the weekly chart, the stock price has formed a double bottom pattern and has given a breakout on the closing basis. This breakout is accompanied with an increase in volumes which supports bullish sentiments ahead. The weekly strength indicator RSI and the momentum indicator Stochastic both are in positive territory that supports upside momentum to continue in the near term. The stock price is sustaining well above its 20, 50 and 100-day SMA that supports bullish sentiments ahead.

Bharat Petroleum Corporation: CMP: Rs 396 | Buying range: Rs 393-387 | Stop loss: Rs 380 | Target: Rs 406-410 | Upside: 4-5 percent

On the weekly chart, the stock price has decisively broken out its consolidation range of Rs 370-312 on a closing basis and is sustaining above the same. This breakout is accompanied by rising volumes that supports bullish sentiments ahead.

The weekly strength indicator RSI and the momentum indicator Stochastic both are in positive territory that supports upside momentum to continue in the near term.

The stock is sustaining well above its 20, 50 and 100-day SMA that supports bullish sentiments ahead.

The author is Head Technical & Derivatives Analyst at Axis Securities Ltd

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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