By Rohan Patil
Nifty 50 was trading in a increasing channel formation considering that July 28 and registered its lifetime higher of 17947.65 on September 24 providing a return of 15% in just 3 months. The Benchmark index on September 30 has broken the decrease band of the increasing channel pattern and has witnessed a breakdown of a increasing channel pattern on the day-to-day time frame.
Prices have breached their upward increasing trend line but have taken robust help at the 21-day exponential moving typical and acted as an anchor point for the index. Prices began with a unfavorable note for the October month expiry and closed under its vital help levels of 17600 levels.
China is facing its worst power crisis in current instances as Beijing tries to crack down on energy-guzzling industries in order to stick to emission targets. As a outcome, 44% of the industrial activity in the world’s second-biggest economy is impacted due to the energy shortage. It began with factories in 3 provinces facing extreme energy cuts, but now residential places in more than 20 provinces are facing outages.
On the weekly chart, costs have formed a bearish dark cloud cover candlestick pattern and costs have slipped practically two per cent from its earlier week’s closing. On the indicator front, day-to-day RSI is at 58 and has shown a bearish divergence with unfavorable crossover, exactly where the value had made larger highs but RSI made a decrease higher. For September month we saw an outperformance from the Nifty Media & Nifty Realty index with a get of more than 30% on the month-to-month closing basis.
As of now, there is no indication of Nifty sliding under the 17200 – 17000 levels, but you by no means know how international development pan out. The resistance is pegged at 18000 levels.
Bank Nifty to face resistance at 38000
Bank Nifty immediately after forming a bearish engulfing candlestick pattern on September 28 witnessed a steep fall of about 1400 points from its all-time higher levels.
The banking index was trading in a increasing channel pattern for the previous one month with a larger higher larger bottom formation on the day-to-day interval. Prices have opened close to the decrease band of the pattern on October 1 but had been in a position to recover from the decrease levels and therefore costs had been in a position to close just close to the decrease band of the pattern.
On the weekly chart banking index has also formed a bearish engulfing candlestick pattern and it will be vital to watch if costs give a bearish confirmation in the this trading week.
Momentum oscillator RSI (14) has just closed close to 50 levels with unfavorable crossover immediately after registering a unfavorable divergence on the day-to-day interval. The MACD indicator has also offered an early indication of a trend reversal by closing under its signal line.
Currently, the Banking index is trading above its Parabolic SAR indicator on the weekly chart which is placed close to 36500 levels. Major resistance is placed close to 38000 levels & on the downside if costs break under 36500 then we may perhaps test 35800 levels.
SUN Pharma: Acquire
CMP: Rs 826 | Target: Rs 884 | Stop Loss: Rs 790
Return: 7%
The costs had been trading in a rectangle formation considering that previous two months and have formed a trend line resistance at 797 levels. SUNPHARMA has broken out of a rectangle pattern at 805 levels on 29th Sept and the costs have registered a decisive breakout that suggests a transform in the trend from sideways to upside.
Stock is trading above its 21, 50 & one hundred- day exponential moving averages on day-to-day time frame, which is positive for the costs in the close to term.
MACD indicator is reading above its centerline with positive crossover above its signal line. Momentum oscillator RSI (14) is reading above 60 levels which indicates positive momentum will like to continue ahead.
CRAFTSMEN: Acquire
CMP: Rs 2106 | Target: Rs 2250 | Stop Loss: Rs 2021
Return 7%
CRAFTSMEN has offered a spectacular rally from the low of 1648 on 21st June 21, to an all-time higher of 2173 on 12th July 2021, and post that rally costs went in a sideways consolidation for more than two months and traded in a variety amongst 1800 to 2000 levels.
CRAFTSMEN has formed a rectangle pattern formation inside that two months period and lastly broken out of a rectangle pattern at 2140.40 levels on 23rd Sept and the costs have registered a decisive breakout that suggests a transform in the trend from sideways to upside.
Stock is trading above its 21, 50 & one hundred- day exponential moving averages on a day-to-day time frame, which is positive for the costs in the close to term.
When we observe volume activity there has been above-typical volume set up from the previous couple of weeks on the day-to-day chart, which indicates accumulation phrase. Momentum oscillator RSI (14) is reading above 60 levels with positive crossover on the day-to-day scale.
(Rohan Patil is a technical Analyst at Bonanza Portfolio, Views expressed are the author’s personal. Please seek the advice of your monetary advisor just before investing.)