By Rohan Patil
In the previous, 3 to 4 occasions anytime the Nifty enters a correction phase, the 21-day exponential moving typical has acted as an anchor point for the index. On the open interest front, great participation and open interest addition had been seen in the 18000 Call and 17800-17700 Put contracts. Thus, we can anticipate the broader variety of the index to 17700-18000 levels. And not too long ago index has whipsawed its bearish engulfing candlestick pattern on the everyday chart and has effectively closed above the higher of the pattern. Whenever we saw a failure of a bearish pattern in the index he has witnessed a a lot stronger trend on the greater side.
Nifty IT and Nifty Auto index has offered a 4 per cent every return exactly where Auto index has offered a breakout of a channel pattern and IT index has offered a V-shape reversal rally on the everyday time frame and each the index are anticipated to outperform in the coming weeks. While Nifty Metal & FMCG index traded flat and closed inside their preceding week’s variety. The realty index continues its breakout trend and is close to 3 per cent greater on the weekly time frame.
As the index is on the verge of the breakout just about every dip must be utilized as a acquiring chance. If Nifty 50 breaks above 18000 levels then the gate for the costs will be open till 18350 – 18500 levels. Strong help is placed close to 17600 – 17550 levels close to its 21 DEMA.
Bank Nifty
Bank Nifty continues to trade above 37000 levels from the last 4 weeks and has also been in a position to close above its horizontal trend line help on the weekly time frame. After forming a bullish hammer candlestick pattern on the everyday chart costs have never ever retested the low of the pattern and traded greater amid volatility on the everyday time frame.
Banking Index continues to trade inside the increasing channel pattern with the greater best greater bottom formation. The index was also in a position to close above its 21-day exponential moving typical which is positive for the costs.
The Momentum oscillator RSI (14) is also sustaining above 60 levels with bullish crossover indicates upside momentum may perhaps resume quickly. Currently, the Banking index is trading above its Parabolic SAR indicator on the weekly chart which is placed close to 36900 levels. Major resistance is placed close to 38200 levels & on the downside if costs break under 36900 then we may perhaps test 36000 levels.
VOLTAS: Purchase
CMP: Rs 1,281 | Target Rs 1,345 | Stop Loss Rs 1,240
Return 05%
The costs had been trading in a variety of 1200 to 1260 for practically one month and have formed flag pattern formation on the everyday chart. VOLTAS has broken out of a flag pattern at 1283 levels on 07th Oct and the costs have registered a decisive breakout that suggests a adjust in the trend from sideways to upside.
Stock is trading above its 21, 50 & one hundred- day exponential moving averages on everyday time frame, which is positive for the costs in the close to term.
MACD indicator is reading above its centerline with a positive crossover above its signal line. Momentum oscillator RSI (14) is reading above 60 levels which indicates positive momentum will like to continue ahead.
MARUTI: Purchase
CMP: Rs 7,430 | Target Rs 8,030 | Stop Loss Rs 7,130
Return 08%
MARUTI has offered a spectacular rally from the low of 4001 on April 3 last year, to a higher of 8329 on January 15, 2021, and post that rally costs went in a sideways consolidation for practically eight months and traded in a variety among 6600 to 7200 levels.
MARUTI has formed a symmetrical triangle formation on the weekly chart inside that eight months period and lastly broken out of a symmetrical triangle pattern at 7430 levels on 08th Oct and the costs have registered a decisive breakout that suggests a adjust in the trend from sideways to upside.
Stock is trading above its 21, 50 & one hundred- day exponential moving averages on a weekly 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 everyday chart, which indicates accumulation phrase. Momentum oscillator RSI (14) is reading close to 60 levels with positive crossover on the weekly scale.
(Rohan Patil is a Technical Analyst, Bonanza Portfolio Ltd. Views expressed are the author’s personal. Please seek advice from your economic advisor prior to investing.)