Bank Nifty is trading below 20-day SMA, which is an important short term moving average, indicating negative bias in the short to medium term
On the weekly chart, Nifty has formed a bearish candle and remains restricted within previous week's high-low range indicating lack of strength on either side. Since past 3-4 weeks, the index is consolidating within a broad range of 12,050-11,800 representing short term sideways trend. Hence, a breakout on either side will indicate further direction.
The chart pattern suggests that if Nifty crosses and sustains above 11,900 levels it would witness buying which would lead the index towards 12,000-12,100 levels. However, if the index breaks below 11,750 it would witness selling that would take the index towards 11,650-11,570.
Nifty is now well placed above its 50 and 100-SMA indicating positive bias in the short term. Nifty continues to remain in an uptrend in the medium term, so buying on dips continues to be our preferred strategy. For the week, we expect Nifty to trade in the range of 11,950-11,600 with a negative bias.
The weekly strength indicator RSI is moving downwards and is quoting below its reference line indicating negative bias. However, momentum oscillator Stochastic is in positive mode indicating a possible consolidation or an upmove in the near term.
On the weekly chart, Bank Nifty has formed a bearish candle forming lower high-low compared to previous week indicating negative bias. The index is moving in a higher top and higher bottom formation on the weekly chart indicating positive bias.
The chart pattern suggests that if Bank Nifty crosses and sustains above 31,050, it would witness buying that would lead the index towards 31,300-31,550. However, if the index breaks below 30,500, it would witness selling that would take the index towards 30,200-29,500.
Bank Nifty is trading below 20-day SMA, which is an important short term moving average, indicating negative bias in the short to medium term.
Bank Nifty continues to remain in an uptrend in the medium term, so buying on dips continues to be our preferred strategy. For the week, we expect Bank Nifty to trade in the range of 31,000-29,500 with a negative bias.
Here are three trade ideas:
RBL Bank June Future | Rating: Sell | CMP: Rs 624 | Stop loss: Rs 648 | Target: Rs 602-590 | Return: 4-6 percent
On daily and weekly charts, the stock has decisively broken down three month's consolidation range (Rs 695-655) on a closing basis that signals weakness and shift of the trend to the downside.
This breakout is accompanied by a huge spurt in volumes that supports bearish sentiments ahead.
On the daily chart, the stock continues to scale downward forming the lower top, lower bottom formation indicating a downtrend.
The daily and weekly strength indicator, RSI and the momentum indicator, Stochastic are in negative mode supporting a bearish bias.
Stock is sustaining below its 20, 50 and 100-day SMA that supports bearish sentiments ahead.
The above analysis indicates the target of Rs 602-590.
ACC June Future | Rating: Sell | CMP: Rs 1,543 | Stop loss: Rs 1,586 | Target: Rs 1,505-1,490 | Return: 3-4 percent
On the weekly chart, the stock has formed a double top - trend reversal pattern that signals weakness on short to medium term charts. The stock continues to sustain below its 20, 50, 100-day SMAs that supports bearish sentiments ahead.
RSI and Stochastic both are in negative mode supporting the bearish bias. The above analysis indicates the target is at Rs 1,505-1,490.
REC | Rating: Buy | CMP: Rs 157 | Stop loss: Rs 147 | Target: Rs 162-164 | Return: 4-7 percent
The stock is trending up across all the time frames indicating a sustained uptrend. On the daily chart, the stock is forming a higher top and higher bottom formation that signals bullish sentiments.
Stock is sustaining above its 20, 50 and 100-day SMA that supports bullish sentiments ahead. The above analysis indicates the target is at Rs 160-164.
The author is Head Technical & Derivatives Research, Axis Securities.
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