“Nifty breaking out 10,430 brightens the possibility of next leg of up-move towards 10,470. Buy-on-dips is advised.” says Jaydeb Dey, Technical Analyst at Stewart & Mackertich Wealth Management Ltd.
By Jaydeb Dey
The Nifty yesterday ended 0.14 percent up at 10,417.15. For the second consecutive session the index continued facing resistance around 10,420 as discussed several times in our previous posts, day’s high was 10,428.15.
Range bound movement in the price band of 10,430 to 10,350 suggests, 38.2percent Fibonacci retracement level of the entire correction from Nifty all time high to its recent low around 9,950 levels has disrupted ongoing up-trend. Needless to say, next leg of up-move is likely only when Nifty starts moving above 10,430 decisively.
Higher resistance is placed around 10,470. Further, Traders and investors may find attractive buying opportunities in terms of risk-reward ratio if the benchmark Index comes down to 10,320.
On the Nifty hourly chart; flattening RSI while Nifty facing resistance around 10,430 is intact. Hence, it may continue facing resistance around 10,430. However, considering the broader chart pattern we still prefer Buy-on-dips around critical supports. Downside critical support is placed around 10,350 and 10,320.
Nifty patterns on multiple time frames show; it continues facing resistance around 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, next leg of up-move towards 10,470 is likely only when it breaks out 10,430 decisively.
The Bank Nifty previous session ended 0.51 percent down at 25,098.25. Downside pivotal support is placed around 24,950. Upside resistances are placed around 25,150 and 25,250.
View on April 12, Bank Nifty weekly expiry:
Bank Nifty 'Option Chain' analysis in terms of percentage change in OI (at the end of yesterday’s session)- Bank Nifty Fut (CMP- 25,096.90) ended at par with Bank Nifty (CMP- 25,098.25). Huge long OI in 25'100-CE followed by long OI in 25'000-CE, 25'200-CE, 25'300-CE, 25'400-CE against minor long OI in 24'900-PE, 24'800-PE, 24'700-PE ahead of today’s weekly expiry suggests, Bank Nifty Fut may open on positive note above 25,100 and likely to hold dual support zone of 25,100 to 25,000.
Opinion- Bank Nifty Fut may see buying on dips around dual support zone of 25,100-25,000 and likely to move upward towards 25,300 and 25,400. On a similar note, intraday trend is expected to remain positive and the broader trading band is expected to be 25,000 to 25,400.
This view is subject to change if and only if it starts moving decisively below 25,000.
Based on thorough technical study, the research firm has recommended Bata India which can give up to 5% return in the short term:
Bata India | Rating: Buy | CMP Rs 792.40 | Target: Rs 820, stop loss: Rs 760 | Return: 5%
Down trending channel breakout in the stock followed by higher highs- higher lows on daily chart is seen. Yesterday it finished off the session with a huge bullish candle above previous bearish reversal point around Rs 775 levels. Rising RSI in tandem with current uptrend makes it a valid breakout.
Based on the above mentioned observations, the house recommends Bata India as a buy on dips for the short-term upside target of Rs 820.
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.