Bank Nifty remains a buy on dip till it trades above 28,750.
Shabbir Kayyumi
Nifty traded with positive bias throughout the last week, the breakout in the benchmark banking index, after four-month long consolidation phase, has boosted bullish sentiment.
Nifty too gave sharp up move after witnessing Bollinger band volatility breakout by closing above 11,168 marks on last Monday.
Nifty is trading above its three major simple moving averages 50 DMA, 100 DMA and 200 DMA which are placed around 10,900 levels, interestingly occurrence of golden crossover formation during the last week, which establishes strong uptrend in mid-term. The index is also forming higher high and higher low formation continuously for the last 4 weeks.
The persistent rally is pushing short term oscillators in the overbought zone. Important Trend line standing around 11,550 marks and upper acceleration band placed around 11,564 will act as resistance for current up move. Moreover, if Nifty crosses and sustains above 11,550 levels it would witness strong buying which would lead the index towards previous swing high zone of 11,735-11,760 levels. On the lower side key support is placed at 11,270 at ascending trend line on the lower timeframe.
Bank Nifty- Post breaking out from the symmetrical triangle pattern at 27,350 levels, Bank Nifty reached the pattern target of 28,800 in one week itself suggesting strong trending move. Bank Nifty remains a buy on dip till it trades above 28,750.
Trade Recommendation:
Dish TV | Rating: Buy around Rs 41 | Target: Rs 51 | Stop Loss: Rs 36 | Upside: 24 percent
DISH TV- The stock has witnessed decent erosion from the peak of 108 to currently bottom out at around 19 levels. Emerging inverted Head & shoulder on daily chart which suggests positive momentum. As of now, it indicated a bullish candle to signify strength and has the potential to carry on the momentum still further on upside.
Indicators and oscillators are looking conducive for the price pattern. Looking at all these technical factors, we suggest buying in the scrip around 41 levels with stop loss below 36 on a closing basis for the target of 51 levels.
Bharat Petroleum Corporation | Rating: Buy around Rs 380 | Target: Rs 460 | Stop Loss: Rs 340 | Upside: 21 percent
The scrip has given inverted Head & Shoulder breakout after giving short term consolidation on weekly chart. From last few days, it has been trading in its congestion zone and formed pole & flag pattern on daily chart which creates buying opportunity in the scrip again.
Moreover, the sustainability of RSI above 9 days EMA giving cues for upside momentum. Strong support is seen at near 340 marks. By looking all these factors, trader and investor can buy this scrip around 380 with the stop loss 340 for the target of 460 levels.
Power Grid Corporation of India | Rating: Buy around Rs 190 | Target: Rs 215 | Stop Loss: Rs 175 | Upside: 13 percent
The stock has maintained its uptrend on the long term after bottoming out at 110 levels. Bullish crossover is seen in the scrip as 20 DMA crossed 200 DMA from downward side which indicate upside move. At the current juncture, the stock has formed a pole and flag pattern on the medium term interval and it is waiting for the breakout above the same. Moreover, declining histogram of MACD in negative territory suggest buying in the scrip. Buy Power grid around 190 with SL of 175 for target of 215.
Trent | Rating: Buy around Rs 381 | Target: Rs 420 | Stop Loss: Rs 360 | Upside: 10 percent
The scrip is moving in a well defined ascending line with multiple touch point and appears to be having strong support around 360 levels as it bounced back multiple time from the demand line. It also maintained its uptrend on the long term chart and is trading well above its short and long term moving averages.
The momentum oscillator, RSI is also favoring the price pattern. One can accumulate the stock around 381 for an upside target of 420 and a stop loss below 360.
ICICI Lombard General Insurance Company | Rating: Buy around Rs 930 | Target: Rs 1,010 | Stop Loss: Rs 899 | Upside: 9 percent
ICICIGI - Scrip seems bottoming out at its lower levels of marks from where it formed CUP & Handle on daily chart suggesting upsurge on higher side. Scrip took support from its upward sloping line along with declining histogram in negative territory of MACD and oversold RSI on daily chart are giving cues that scrip can take a turn on northward side.
Principal of polarity can provide strong support in coming sessions. Aforementioned rationale suggests buying in the scrip around 930 for the target of 1010 with the stop loss of 899.
(The author is Head of Technical & Derivative Research at Narnolia Financial Advisors Ltd.)
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