“Nifty may face short-term resistance around 10,420, which is the 38.2 percent Fibonacci retracement level of the entire correction from the all time high to its recent low around 9950 levels. Buy-on-dips is advised.” says Jaydeb Dey, Technical Analyst at Stewart & Mackertich Wealth Management Ltd.
Jaydeb Dey
Stewart & Mackertich Wealth Management Ltd.
The Nifty yesterday ended 0.46 percent up at 10,379.35. Early morning swift pullback from day’s low around 10,329 followed by consolidation in the latter half led to end the session with another bullish body candle. Closing above 10,370 brightens the possibility of Nifty challenging next resistance placed around 10,420, which is the 38.2 percent Fibonacci retracement level of the entire correction from Nifty all time high to its recent low around 9950 levels.
However, it may find very short-term pause around 10,420 before its next leg of up-move towards 10,470. Hence, dips towards critical supports are subject to be bought in again.
On the Nifty hourly chart; flattening RSI suggests Nifty retracement from the immediate resistance placed around 10,420 is likely. However, considering the broader chart pattern we still prefer Buy-on-dips around critical supports. Downside critical supports are placed around 10,320 and 10,280.
Nifty patterns on multiple time frames show; it is approaching towards 38.2 percent Fibonacci retracement level, placed around 10,420, of the entire correction from the all-time high to its recent low around 9950. Hence, intraday correction towards 10,320 is likely. We still recommend Buy-on-dips strategy as long as critical supports are intact.
The Bank Nifty previous session ended 0.89 percent up at 25,093.80. It has already reached critical resistance placed around 25,150. Hence, Bank Nifty getting into consolidation in the price band 25,150 to 24,650 is likely. However, breaking out 25,150 brightens the possibility of Bank Nifty heading towards 25,250.
Based on thorough technical study, the research firm has recommended HPCL which can give up to 5% return in the near short term:
Hindustan Petroleum Corporation Ltd: Rating Buy | (CMP: Rs 366.80) | Target: Rs 382 | Stop loss: Rs 352 | Return: 5%
The stock ended the session with a downward trend line breakout on daily chart. On a similar note, a clear Head-and-Shoulder pattern breakout on the hourly chart is clearly visible. Finishing off the session with a big marubozu candle above the 30 daily EMA placed around Rs 361 levels coupled with rising RSI while +DI –DI bullish crossover is seen makes the bull case even stronger.
Based on the above mentioned observations, the house recommends HPCL as a buy on dips for the short-term upside target of Rs 382.
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.