By Rohan Patil
Benchmark Index traded in a narrow variety of 15550 and 15950 levels for pretty much eight weeks and formed a channel pattern on the day-to-day time frame. The index ultimately broke its consolidation variety on the larger side and witnessed a channel pattern breakout on 3rd August and registered a lifetime higher 16349.45 levels on August 5. Nifty 50 has offered a 3.01 per cent returned on the weekly chart, which indicates a pretty sturdy consolidation breakout.
When we analyze the weekly chart Nifty has offered a bullish pole flag pattern breakout and larger higher larger low formation is most likely to continue ahead. Momentum oscillator RSI (14) has also offered a horizontal trend line breakout at 63 levels and at present closed 69 levels with bullish crossover on the weekly interval.
Since the index is trading in uncharted territory, working with Fibonacci extensions suggests 16500 will be the next resistance for the index, and on the downside supports are placed close to 15950 which was the preceding resistance zone.
Nifty Economic Index witnessed a consolidation breakout that generated 4.05 per cent returns for the week and it is the major gainer amongst all indices. Nifty IT Index continued to close larger for the fourth straight week rose 2.70 per cent for the week. The Index’s which underperformed or closed in red for the week is the Nifty Media Index which drifts for more than 4 per cent and closed under its 50- DMA.
BANK NIFTY
Bank Nifty on August 6, began the day with a gap-up opening but was unable to surpass the psychological level of 36000 on a closing basis. In the preceding 3 trading sessions, we witnessed promoting stress close to 36000-36200 zones.
Reading the alternative chain information, we see that maximum get in touch with writing has taken at 36000 strike price tag which will be vital in upcoming trading sessions. If the price tag is capable to sustain this zone we may well see an upswing till 36550 levels. On the Put side, maximum OI is at 35500 and 35000 levels respectively which will act as quick help.
On the indicator front, MACD has offered a positive Crossover which indicates that the move is most likely to continue northward. The day-to-day RSI is at 60 which imply that the index has nevertheless not reached overbought levels and the upside is most likely to be seen. ADX (14) shows a reading of 17 and is increasing which explains the strength of the trend will continue.
Currently, the index is trading above its important exponential moving averages. Major resistance is placed close to 36500 levels and on the downside, important help zone is at 33500 on the weekly charts.
HCL Technologies: Invest in
CMP: Rs 1050 | Target Rs 1147 |Stop Loss Rs 1005
Return 09.23%
HCL Technologies has offered a spectacular rally from the low of 375 on 20th March 20, to an all-time higher of 1067 on 15th Jan 2021, and post that rally rates went in a sideways consolidation for pretty much six months and traded in a variety involving 1040 to 950 levels.
HCL Tech has formed a triangle formation inside that six months period and ultimately broken out of a triangle pattern at 1061 levels on 05th Aug and the rates have registered a decisive breakout that suggests a modify 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 rates 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.
HEG: Invest in
CMP: Rs 2365 | Target Rs 2530 | Stop Loss Rs 2270
Return 7%
The rates had been trading in a variety of 2160 to 2290 for pretty much two months and have formed triangle pattern formation on the day-to-day chart. HEG has broken out of a triangle pattern at 2347 levels on 02nd Aug and the rates have registered a decisive breakout that suggests a modify 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 rates 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 close to 60 levels which indicates positive momentum will like to continue ahead.
(Rohan Patil is a Technical Analyst at Bonanza Portfolio Ltd. Views expressed are the author’s personal. Please seek the advice of your monetary advisor just before investing.)