“Nifty breaking out cluster of resistances placed around 10,570 to 10,600 is unlikely as of now” says Jaydeb Dey, Technical Analyst at Stewart & Mackertich Wealth Management Ltd.
Jaydeb Dey
The Nifty previous Friday ended 0.01 percent down at 10,564.05. Its range bound movement below the cluster of resistances placed around 10,570 to 10,600 continued for the fourth consecutive session.
Day long oscillation within a tiny range for the entire session led to a Doji candle on daily chart. On the weekly chart it ended 0.8 percent up. Higher highs- higher lows pattern continues on the weekly chart towards ending with another bullish Marubozu candle, which implies this uptrend is likely to pull ahead towards pivotal resistances placed around 10,630 and 10,700. Hence, buy-on-dips is the strategy to be followed.
However, ending the last trading session of the week with a Doji candle implies hesitancy among traders may persist in the beginning of the next week. Hence, buying-on-dips is advised. Bulls may find down side critical supports placed around 10,480 and 10,420 very alluring.
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On the Nifty hourly chart; negative divergence in RSI is still intact, which may continue building selling pressure on rise around 10,570. Midway resistance is placed around 10,530.
Nifty patterns on multiple time frames show; it ended on indecisive note on the last day of the week. Hence, nervousness may persist in the first half of the week. However, considering the broader trend, we prefer buy on dips around critical supports placed around 10,480 and 10,420.
The Bank Nifty previous Friday ended 0.73 percent down at 24,943.85. Immediate pivotal support is placed around 24,850. Next support is placed around 24,550, while the upside resistance is placed around 25,000.
Based on thorough technical study, the research firm has recommended Wipro which can give up to 5% return in the near short term:
Wipro | Rating: Buy | Target: Rs 310, stop loss: Rs 288, Return: 5%
The stock ended the week above critical resistance placed around Rs 295 levels. This breakout is backed by rising RSI while MACD histogram recovered above the zero line. +DI –DI bullish crossover makes the bull case even stronger.
Based on above mentioned observations, the house recommends Wipro as a buy on dips for the short term upside target of Rs 310.
ICICI Bank | Rating: Sell | Target: Rs 273, stop loss: Rs 291, Return: 4%
Bounce back from the level of Rs 260 failed to breakout critical resistance of Rs 295 followed by a bearish candle on the last trading session of the week. The stock is still trading below the 200 EMA on daily chart paced around Rs 298, which implies the bearish trend is not over yet.
MACD histogram on daily chart has not recovered above the zero line yet while –DI +DI bearish crossover on daily chart is clearly visible.
Based on the above mentioned observations, the firm recommends ICICI Bank as a sell on rise for the short term downside target of Rs 273.
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.