"Nifty is likely to get into a trading band of 10,510 to 10,600.” says Jaydeb Dey, Technical Analyst at Stewart & Mackertich Wealth Management Ltd.
Jaydeb Dey
The Nifty yesterday ended 0.21 percent down at 10,526.20. Early morning positive opening failed to sustain above critical resistance placed around 10,570 followed by sharp retracement in the last half of the session.
Reacting down from day’s high 10,594 towards ending the session much below 10,570 suggests, Nifty may continue to face resistance on rise around 10,570 levels in coming sessions as well.
This critical resistance of 10,570, 50 percent Fibonacci retracement level of the entire downfall from the Nifty all time high to its recent low around 9950 levels, has to be taken out on the upside towards unfolding next leg of upmove. But, that looks unlikely at this juncture. Hence staying cautious on rise is advised. Down side supports are placed around 10,510 and 10,460.
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On the Nifty hourly chart; negative divergence in RSI followed by upward trend line breakdown is seen, which may continue to build selling pressure on rise around 10,570 levels. Hence, buying is not advised at this juncture. 50 EMA placed around 10,470 may play a critical role in coming sessions.
Nifty patterns on multiple time frames show; it reacted down from day’s high 10,594 towards ending the session with a bearish candle. This pattern suggests, Nifty might get into a corrective down move within the broader uptrend.
The Bank Nifty previous day ended 0.92 percent down at 25,102.30. Ending the session with a big bearish Marubozu candle below the support of 25,150 suggests, it may continue facing resistance on rise around 25,250 and 25,400. Downside supports are placed around 25,000 and 24,800.
View on April 19 Bank Nifty weekly expiry:
Bank Nifty 'Option Chain' analysis in terms of percentage change in OI (at the end of today’s session)- Bank Nifty Fut (CMP- 25,124.85) ended in 22 points premium against Bank Nifty (CMP- 25,102.30).
Huge long OI build up in 25'100-CE followed by long OI build up in 25'200-CE, 25'300-CE, 25'400-CE against minor long OI build up in 24'900-PE & 24'800-PE ahead of today’s weekly expiry suggests, Bank Nifty Fut may open on positive note around 25,100 and hold the support around 25,100.
Opinion- BankNifty Fut may see intraday buying on dips around 25,100 and continue to face tough resistance on rise around 25,300 and 25,400. On a similar note, intraday trend is expected to remain positive within the broader trading band of 25,100 to 25,400.
This view is subject to change if and only if it starts moving decisively below 25,100.
Based on thorough technical study, the house recommends Bank of Baroda which can give up to 6% return in the near short term:
Bank of Baroda | Rating: Sell | Target: Rs 136, stop loss: Rs 151, Return: 6%
The stock previous session ended with a bearish Marubozu candle below the critical support of Rs 146. Also, ending the session below the 30 EMA on daily chart with rising open interest implies, the stock may once again come down Rs 136.
Based on above mentioned observations, the firm recommends Bank of Baroda as a sell on rise for the short term downside target of Rs 136.
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.