As Nifty is still trading within the rising channel pattern, the bullish trend is most likely to continue, going ahead, says Rohan Patil of Bonanza Portfolio.
RohanPatil
September 30, 2021 / 07:12 AM IST
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The Nifty50 continued to close in the negative zone for the third straight day. It closed just near the lower band of the rising channel pattern on the daily time frame. The benchmark index on September 29 witnessed a gap-down opening following the global market but was able to cover the majority of its losses through the day to close marginally lower from its previous day’s close.
Indices tend to be volatile in the last week of monthly expiry and it is imperative to see the futures rollover data to gauge the expectation of the move for the next month. A spike in the US benchmark bond yield and a strong dollar capped gains in Indian markets.
As prices are still trading within the rising channel pattern, the bullish trend is most likely to continue, going ahead. In case levels breach the lower band of the pattern, which is placed near 17,600–17,550 levels, we may see a short-term bearish trend that may dominate the market. The resistance is capped at 17,950 levels.
The Bank Nifty formed a Bearish Engulfing Candlestick pattern on the September 28, and on September 29 prices closed below the bearish pattern, which indicates a confirmation of a bearish candlestick pattern.
Prices are closely trading above their upward rising trendline on the daily chart, which is placed near 37,200 levels. If prices continue to sustain above 37,200 then a bullish trend may resume soon but in case the index closes below the trend line, may extend towards 36,400 levels. The resistance for the Bank Nifty is capped near 38,400 levels.
Here are two buy and one sell calls for the next two-three weeks:
Sun Pharma: Buy | CMP: Rs 811.30 | Target: Rs 855 | Stop Loss: Rs 785 | Return: 5.50 percent
The prices were trading in a rectangle formation since past two months and have now formed a trend line resistance at Rs 797 levels.
Sun Pharma has broken out of a rectangle pattern at Rs 805 levels on September 29 and the prices have registered a decisive breakout that suggests a change in the trend from sideways to upside.
The stock is trading above its 21, 50 & 100-day exponential moving averages on the daily time frame, which is positive for the prices in the near term.
MACD indicator is reading above its centerline with positive crossover above its signal line. Momentum oscillator RSI (14) is reading above 60 levels which indicates positive momentum is likely to continue ahead.
Britannia Industries October Futures: Sell | CMP: Rs 4,003 | Target: Rs 3,800 | Stop Loss: Rs 4,125 | Return: 5.1 percent
The stock has witnessed a breakdown of an upward rising trend line on the daily time frame and has closed below the same. Overall we have seen that the stock has underperformed the benchmark index and has drifted lower.
The prices on the daily chart are trading below their 21 – day exponential moving averages and we have observed a distribution formation on the weekly chart after registering lifetime high levels of Rs 4,153.
Momentum oscillator RSI (14) has drift from the overbought level and reading below 55 levels on the daily time frame indicates short term bearishness in the counter.
Dixon Technologies: Buy | CMP: Rs 4,465 | Target: Rs 4,820 | Stop Loss: Rs 4,285 | Return: 8 percent
Dixon has been trading in an uptrend and can be seen trading in a rising channel pattern on the daily time frame. Recently the stock has found a support near its lower band of the channel and has formed an inverted head & shoulder pattern.
At the current junction, this stock has given a breakout above the Inverted Head & Shoulder pattern after taking a support at its 21 & 50 – day exponential moving averages on the daily interval.
The breakout is observed with marginally higher a volume which indicates a price volume breakout scenario. Positive divergence on secondary oscillators suggests momentum is likely to continue ahead.
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