“Nifty once again challenging critical resistance placed around 10,780 is a glaring possibility.” says Jaydeb Dey, Technical Analyst at Stewart & Mackertich Wealth Management Ltd.
Jaydeb Dey
The Nifty ended Monday 0.92 percent higher at 10,715.50. A positive opening accompanied by follow through buying led to the benchmark closing with a bullish body candle. A spectacular recovery from the day’s low of 10,636 and close above the critical resistance placed at 10,700 is invigorating for aggressive bulls.
Considering strength of the primary trend, we prefer a buy on dips strategy as of now. The downside critical support for the Nifty is now placed around 10,700 and 10,640 levels. End of the day candle pattern suggests the index may challenge its upside resistance placed around 10,780 levels.
On the Nifty hourly chart, a pullback from its 100 day exponential moving average (EMA) followed by a recovery above 10,700 led to the index ending the session on a stronger note. Hence, it appears likely that the index will once again challenge its upside resistance placed around 10,780.
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The index patterns on multiple timeframes show a recovery from around 10,600 levels followed by an ending above the 10,700 mark which is critical from a technical perspective. The next leg of the upmove towards 10,780 is now a glaring possibility with 10,820 as the next resistance.
The Bank Nifty on Monday ended 0.81 percent higher at 25,852.05. Its upside critical resistance is placed around 26,140 levels. Downside pivotal support is seen around 25,680 levels.
The research firm sees Larsen & Toubro (L&T) offering up to five percent return in the short-term.
Larsen & Toubro | Rating: Buy | Target: Rs 1440, stop loss: Rs 1350, Return: 4%
The stock, after reacting down from its recent high around Rs 1420, has come down to the short-term upward trend line support and reverted back towards ending the session with a bullish body candle.
Based on the above mentioned observations, the house recommends L&T as a buy on dips for the short-term upside target of Rs 1440.
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.