By Rohan Patil
At the starting of the earlier week, the benchmark index griped in volatility and we witnessed a tug of war in between bulls and bears in the initial days of the trading week. However, Nifty 50 traded inside the increasing channel pattern and took powerful assistance close to the decrease band of the channel pattern and witnessed a sharp rally and registered its new lifetime higher levels of 17947.65 on September 24.
As we are approaching close to the upper band of the channel pattern index may perhaps witness some profit booking or consolidation in the coming trading session.
Nifty REALTY and Nifty IT outperformed and ruled the Dalal street for this week exactly where the REALTY index top rated the chart with a acquire of 21.22% and the IT index gained 4.09% and continue to lead the benchmark index. The Nifty Metal index appears to be in its distribution phase and closed at 5498.20 levels with a loss of 3.27% and indicates an overbought situation.
To conclude, we think that the bullish trend will be continued in the big-cap space. We can anticipate Nifty to take a breather as we are approaching close to the upper band of the increasing channel pattern. A dip of a couple of per cent would be a superior chance for traders to enter. The instant resistance is capped close to the 18000 mark and the assistance for the index is placed close to 17600 – 17500 levels.
BANK NIFTY
Last week, Bank Nifty had offered a breakout and posted a record higher of 38112 but this week saw some profit booking in the index and was unable to continue the momentum on the upside. Though there was no adhere to-via purchasing, the index witnessed some volatile trading sessions owing to the FOMC meeting and strengthening of USD against INR.
On the weekly charts, Bank nifty has offered a breakout above 37700 which was the intermediate top rated made in February, and following 7 months of consolidation, it is most likely that a fresh-up move will commence taking the index at larger levels. Some essential levels will be seen in the coming week if the index manages to sustain above 38150.
On the upside, 38500 will hold important resistance based on Fibonacci extension targets. On the downside, weakness can be seen if the index begins to trade beneath 37200 taking it additional down to 36550 levels.
COAL INDIA: Purchase
CMP: Rs 166.10 | Target Rs 185
Stop Loss Rs. 157 | Return 11.50%
The rates have been trading in a symmetrical triangle formation for the previous nine months and have formed a trend line resistance at 160 levels.
COAL INDIA has broken out of a symmetrical triangle pattern at 166 levels on 23rd Sept and the rates have registered a decisive breakout that suggests a alter in the trend from sideways to upside.
Indicators and oscillators like RSI & MACD have been displaying strength on the everyday and weekly charts. Prices are trading above their 21 & 50-day exponential moving averages and based on the value action evaluation on the quick and the medium timeframes we can say that the medium-term trend of the stock remains bullish.
Based on the above Technical research we can come out with a view that the value may perhaps move towards larger levels more than a quick period.
Mahindra & Mahindra Financial Services: Purchase
CMP: Rs 182 | Target Rs 200
Stop Loss Rs 173 | Return 10%
The rates have been trading in a falling channel formation for the previous two months and have formed a trend line resistance at 170 levels.
M&MFIN has broken out of a falling channel pattern at 179.35 levels on 17th Sept and the rates have registered a decisive breakout that suggests a alter in the trend from sideways to upside.
Stock is trading above its 21, 50 & one hundred- day exponential moving averages on the everyday time frame, which is positive for the rates in the close to term.
The MACD indicator is reading above its centerline with a positive crossover above its signal line. Momentum oscillator RSI (14) is reading above 65 levels which indicates positive momentum will like to continue ahead.
TATA STEEL OCT FUT: SELL
CMP: Rs 1272 | Target Rs 1235
Stop Loss Rs 1290
The stock has witnessed a breakdown of an upward increasing trend line on the everyday time frame and has closed beneath the very same. Overall we have seen that the stock has underperformed the benchmark index and has drifted decrease.
The rates on the everyday chart are trading beneath their 21 & 50 – day exponential moving averages and we have observed a distribution formation on the weekly chart following registering lifetime higher levels of 1534.
This week TATASTEEL has offered a gap-down opening in the begin of the week and was not capable to fill the gap in spite of the positive sentiments in the all round industry.
(Rohan Patil is a Technical Analyst at Bonanza Portfolio. Views expressed are the author’s personal. Please seek advice from your economic advisor prior to investing.)