By Rohan Patil
The Benchmark NSE Nifty 50 index, for the last two trading sessions, is hovering inside a pretty narrow variety and has formed two consecutive modest candles indicating a sideways trading variety. Nifty 50 broke its narrow variety candlestick consolidation on 27th Aug 2021 and registered its lifetime higher of 16722.05 levels.
Nifty has also whipsawed its bearish dark cloud cover pattern which was formed on August 18, indicating bulls are getting the upper hand in the present situation. From the last couple of trading sessions market place breadth is in the favor of the bulls. In terms of ratio on each and every two positive closings, there is one unfavorable closing that indicates a 2:1 ratio.
The index is closely trading above its 21-day exponential moving typical on the each day interval. We have also spotted a bullish hidden divergence in the RSI (14) exactly where costs did not register a new intermediate low but RSI formed a new low close to 65 levels on the each day interval.
Nifty closed properly above the 16600 level which is an optimistic commence to the September series. The upside resistance is probably to be capped close to 16950 – 17000 levels. For now, the assistance level for the Nifty stands at 16400 – 16300 levels.
BANK NIFTY
It was a volatile week for the Bank Nifty exactly where costs traded in a one thousand points variety and closed 1.70 per cent greater from its prior week’s close. Prices are trading inside the rectangle pattern on the each day time frame and have been capable to close above their 21 & 50-day exponential moving averages. Bank Nifty has constantly underperformed the Benchmark index on all the time frames which is visible of relative strength (RS) indicator. The majority of the indicators & oscillator has indicated a unfavorable trend for the banking index.
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Momentum oscillator RSI (14) has flattened out close to the 55 – 65 variety and clearly indicates a sideways trading variety in the Banking stocks on the weekly time frame. The upside resistance is probably to be capped close to 36300 – 36400 levels. For now, the assistance level for the Bank Nifty stands at 34800 – 34600 levels.
Stocks to purchase
HDFC BANK: Invest in
CMP: Rs 1548.45
Target RS 1635 | Stop Loss Rs 1500 | Return 05.62%
The costs have been trading in a symmetrical triangle formation for the previous 4 months and have formed a trend line resistance at 1530 levels. HDFC BANK has broken out of a symmetrical triangle pattern at 1558 levels on 24th Aug 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 each 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.
ABB INDIA: Invest in
CMP: Rs 1850
Target Rs 2050 | Stop Loss Rs 1790 | Return 11%
A swing trade setup is visible for ABB India Ltd. The stock can give up to 11 % returns. It has provided a multi-year breakout and the momentum is probably to continue. The value setup appears promising with a large green candle coupled with impressive volumes. On the front of the indicator, MACD has shown a positive crossover on each day charts and ADX is displaying a reading of 22 with a increasing trend.
The counter has probably to comprehensive its accumulation phrase close to its horizontal trend line assistance on the weekly scale. RSI (14) on the each day chart is reading close to 67 levels indicates stock nevertheless has a lot of potentials to move ahead.
BRITANNIA: Invest in
CMP: Rs 3941
Target Rs 4220 | Stop Loss Rs 3783 | Return 07%
BRITANNIA registered its low of Rs 2100 on March 20 and costs witnessed a sharp reversal and gave a return of 90 % in just 4 months and made a higher of 4010 on 24th July 20. And post that counter consolidated in a falling channel pattern on the weekly scale.
Last week’s costs have provided a breakout of a one-year-extended consolidation pattern and tested its 52-week higher of Rs. 3967.50. The Nifty FMCG index itself has provided a breakout of eight weeks conjunction zone indicates FMCG index is probably to lead from the front.
On the each day chart, the stock has formed a W pattern right after forming a double bottom pattern about the Rs. 3400 level, beneath its 200-day exponential moving typical.
(Rohan Patil is a Technical Analyst at Bonanza Portfolio. Views expressed are the author’s personal. Please seek the advice of your economic advisor ahead of investing.)