" A minor hurdle has been passed with a close above Rs 245 and expects the stock to move higher with next target at Rs 265 with strict stop loss at Rs 240," says Mustafa Nadeem of Epic Research.
By Mustafa Nadeem
Epic Research
Nifty ended up for a positive close on the second consecutive day as we witnessed buying in all sectors with a resumption of an upward move based on improving breadth. The current trend is largely due to the move we have seen in last week.
The positive close last week with a reversal pattern on weekly chart concluded the ground for short-term term bulls. The follow-up buying has now provided short-term term support with price action establishing itself above 200 days MA and this is the half battle done.
With previous week the sentiments pertaining to the overall global trade war fear that may further push markets down was seen cooling off and breadth was one important indicator that improved lately.
Despite domestic cues turning to be all against the banking sector, we have seen a decent short covering in PSU and private banks. There may be some short-term swings but the overall structure for leading indices looks bullish.
A break of the channel on a closing basis in short-term will give us further confirmation of the upward momentum on a sustainable basis. With that, we are also witnessing 50 percent retracement to be providing the psychological support.
We expect next upside resistance to be around 10,350 and 10,380 which comes to be our immediate short-term targets. Bank Nifty is also showing some positive signs of reversal and as far as we are above 24,200 in that index, we expect prices to retrace higher.
We suggest buying on dips strategy for short term with 10,150 as our stop loss and reverse level.
State Bank of India | Rating: Buy | Target: Rs 265, stop loss: Rs 240 | Return: 6%
The stock has filled the gap on the daily charts that was made in 2017 while structurally we are seeing a double bottom formation and expect the price to sustain these levels. A minor hurdle has been passed with a close above Rs 245 and expects the stock to move higher with next target at Rs 265 with strict stop loss at Rs 240.
Disclaimer: The author is CEO, Epic Research for your consideration. The views and investment tips expressed by investment experts on moneycontrol.com are his own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.