“Nifty is likely to get into a consolidation in the price band of 10,280 to 10,370 before next leg of up-move towards 10,420. Trade with positive bias.” says Jaydeb Dey, Technical Analyst at Stewart & Mackertich Wealth Management Ltd.
Jaydeb Dey
Stewart & Mackertich Wealth Management Ltd.
The Nifty previous session ended 1.94 percent up at 10,325.15. It closed above the pivotal resistance of 10,300 as discussed earlier.
Post the RBI monetary policy outcome aggressive buying in last hour of trade led the Benchmark Index above 10,300 levels. Strength seen in Nifty despite fears of global trade war is motivating for the aggressive bulls.
The 30 daily EMA placed around 10,290 may now act as the critical support. Upside resistances are placed around 10,370 and 10,420. However, Nifty getting into consolidation in the price band of 10,280 to 10,370 before next leg of upward movement towards 10,420 is likely.
On the Nifty hourly chart; it closed above the 200 EMA on hourly chart placed around 10,280 and likely to move upward towards 10,370. 10,420 is the next resistance. Hence, needless to say we prefer Buy-on-dips strategy. 200 hourly EMA placed around 10,280 may now act as the critical support in coming sessions.
Nifty patterns on multiple time frames show; Falling-Wedge breakout, a bullish reversal pattern, has become fully operative. This pattern suggests, Nifty is heading towards 10,370 and 10,420. Further, we recommend leading metal sector stocks on dips for buying.
The Bank Nifty yesterday ended 2.61 percent up at 24,759.80. It is likely to move upward towards 24,950 and 25,050. Downside pivotal support is now placed around 24,640.
Based on thorough technical study, the research firm has recommended Jindal Steel & Power which can give up to 4 percent return in the near short term:
Jindal Steel & Power Ltd | Rating: Buy | Target: Rs 244, stop loss: Rs 229 | Return: 4%
The stock in the previous session ended on the verge of a consolidation breakout. It closed just above the 30 EMA on daily chart while RSI shows huge positive divergence.
Based on the above mentioned observations, the house has recommended Jindal Steel & Power as a buy on dips for the short-term upside target of Rs 244.
Disclaimer: The author is Technical Analyst at Stewart & Mackertich Wealth Management Ltd. The views and ideas expressed above may have been suggested to the clients of Stewart & Mackertich Wealth Management Ltd. It is advised that investors/traders should consult with their Certified Experts before taking any investment decision.