Bulls should utilise any dip as a good buying
By Jay Thakkar, Head of Derivatives & Technical Research, Anand Rathi
Where are We?
Nifty has been forming higher tops and higher bottoms in an upward sloping parallel channel. Charts clearly indicate that the short-term and medium-term trend is up i.e. in tandem with the primary trend i.e. up. The index provided a breakout in July 2018 and its continuing its upward journey in August as well. So, till the fifth wave up isn’t over, the bulls will continue to have an upper hand.
What is in Store?
Nifty is trading in wave 3 of wave 5 up which indicates that the overall chart structure is still positive and the medium term trend is likely to continue. Now, the rise from the recent lows of 10,646 seems to be impulsive in nature i.e. it has a clear fi ve waves rising structure, hence the probability of shortterm correction exists, but the intermediate trend remains up.The monthly and weekly momentum indicators are absolutely in buy mode, so there is no evidence from it of any kind of reversal from up to down. The index is trading well above its crucial 200DMA as well as its short-term moving averages i.e. 20DMA and 40DEMA.
What could Investors Do?
Investors are advised to remain bullish for a couple of months going forward as the wave up has just begun and is still away from its conservative and aggressive targets i.e. 11,800 and 12,400, respectively. Till 10,900 levels aren’t broken, the bulls should not give up. Rather the bulls should utilise any dip as a good buying opportunity.
Based on the above, the following stocks look good — Glenmark, Sun Pharma, DLF. Indiabulls Real Estate, Sobha Developers, Kolte Patil, Pidilite, Maruti, M&M, Axis Bank, ICICI Bank and YES Bank.
Where are We?
Nifty has been forming higher tops and higher bottoms in an upward sloping parallel channel. Charts clearly indicate that the short-term and medium-term trend is up i.e. in tandem with the primary trend i.e. up. The index provided a breakout in July 2018 and its continuing its upward journey in August as well. So, till the fifth wave up isn’t over, the bulls will continue to have an upper hand.
What is in Store?
Nifty is trading in wave 3 of wave 5 up which indicates that the overall chart structure is still positive and the medium term trend is likely to continue. Now, the rise from the recent lows of 10,646 seems to be impulsive in nature i.e. it has a clear fi ve waves rising structure, hence the probability of shortterm correction exists, but the intermediate trend remains up.The monthly and weekly momentum indicators are absolutely in buy mode, so there is no evidence from it of any kind of reversal from up to down. The index is trading well above its crucial 200DMA as well as its short-term moving averages i.e. 20DMA and 40DEMA.
What could Investors Do?
Investors are advised to remain bullish for a couple of months going forward as the wave up has just begun and is still away from its conservative and aggressive targets i.e. 11,800 and 12,400, respectively. Till 10,900 levels aren’t broken, the bulls should not give up. Rather the bulls should utilise any dip as a good buying opportunity.
Based on the above, the following stocks look good — Glenmark, Sun Pharma, DLF. Indiabulls Real Estate, Sobha Developers, Kolte Patil, Pidilite, Maruti, M&M, Axis Bank, ICICI Bank and YES Bank.