"Sustained closing may take the Benchmark index towards 10,440 and 10,470. Further, stock specific recovery in the oversold ones might be the key feature," says Jaydeb Dey, Technical Analyst at Stewart & Mackertich Wealth Management Ltd.
By Stewart & Mackertich Wealth Management Ltd.
Nifty ended yesterday 1.90 percent up at 10,421.40. It closed above the pivotal resistance of 10,400 with a big marubozu candle. The index ending the session above dual resistance zone of 10,340 to 10,400 led to a short-term structural change, which may result into further rise towards 10,440 and 10,470. 30-daily EMA is placed around 10,470 may now act as the next critical resistance.
Sharp pullback in the latter half of the session followed by closing marginally above the 100 daily EMA is encouraging for the aggressive bulls. Hence, follow through buying especially in the oversold stocks might be a dominant feature in market. On a similar note, intraday retracement towards 10,400 might again get bought in for higher resistances placed around 10,440 and 10,470.
On the Nifty hourly chart; successful closing above 10400, 100 hourly EMA, brightens the possibility of further rise towards 200 hourly EMA placed around 10,470. Also, downward trend line breakout around 10,400 is another strong evidence in support of our bullish argument.
"Nifty patterns on multiple time frames show, closing above 10,400 is a manifestation of a structural change. Sustained closing may take the Benchmark index towards 10,440 and 10,470. Further, stock specific recovery in the oversold ones might be the key feature," says Jaydeb Dey, Technical Analyst at Stewart & Mackertich Wealth Management Ltd.
Bank Nifty yesterday ended at 24664.20 (up 1.51 percent). It convincingly closed above 200-daily EMA placed around 24,480. Hence, retesting upside resistance placed around 24,850 is likely.
Based on thorough technical study, Stewart & Mackertich recommends Infosys which can give up to 5% return in the near short term:
Infosys | Rating: Buy | Target: Rs 1235, stop loss: Rs 1145 | Return: 5%
Infosys yesterday opened gap-up and ended the session with a symmetric triangle pattern breakout. Symmetric triangle breakout while the primary uptrend is well intact is an indication continuation of bullish trend. leading trend following indicators moving in tandem with this bullish continuation pattern breakout while RSI on daily chart has turned upward.
Based on the above mentioned observations, Infosys is a strong buy on dips stock for the near-term upside target of Rs 1235.
Disclaimer: The author is Technical Analyst, Stewart & Mackertich Wealth Management Ltd.
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