“The stock has strong support in the Rs 345-340 zone, indicating a potential buying opportunity if the stock retraces to this level. Considering the breakout and support levels, there is a possibility that the stock may continue to move higher. Traders and investors might look for potential price targets around Rs 400 or even Rs 430 levels as the stock continues its upward trajectory,” Shah says.
Edited excerpts from an interview:
Nifty bulls got fever at 20,000-mark. Do the charts indicate that the milestone is likely to be hit next week if IT stocks do not play spoilsport?
During the trading period, the Nifty Index fell short of reaching the significant milestone of 20000 by a mere 9 points and experienced a sharp correction, primarily driven by declines in IT sector stocks. The correction resulted in a notable drop in the index’s value, indicating bearish sentiment in the market.
The price chart of the Nifty Index displayed a Doji candle pattern, often interpreted as a sign of indecisiveness among traders. The Doji candle indicates that the opening and closing prices of the index were very close or almost identical, creating a small-bodied candle with long upper and lower shadows. This pattern suggests that neither the bulls nor the bears had a clear advantage during the trading session and that the market was in a state of uncertainty.
The direction of the trend remains ambiguous, and a break on either side of the Doji candle’s range could provide clarity on the future market direction. If the index breaks above the resistance level at 18,900, the bulls may regain strength and aim to achieve the 20,000 mark. On the other hand, a break below a certain support level could signify a continuation of the bearish trend.
How should one trade Nifty Bank, which was the top outperformer in the week? Will it outpace Nifty again?
The ongoing outperformance of the index faces the risk of stalling if it breaks below the strong support level at 45500. This support level has played a crucial role in preventing further downside movements, but a break below it could signal a potential shift in market sentiment.
Currently, the index is facing immediate resistance at the 46,300-46,400 levels. Overcoming this resistance would give the bulls an advantage again and could potentially lead to further upward movements in the index.
How do the charts look like for IT stocks like Infosys and HCL Tech?
Infosys is facing strong resistance on the upside at the 1,360-1,400 zone, and traders are advised to consider using any rallies within this range to initiate fresh short positions. This suggests that the stock’s price has struggled to rise significantly beyond this zone, potentially indicating a bearish outlook.
On the downside, the immediate support for Infosys is at 1,300. A break below this support level could intensify selling pressure and lead to further downward movements in the stock’s price.
Meanwhile, HCL Technologies (HCLT) is attempting to find support in the 1100-1080 zone. If the stock manages to hold above this support level, it could potentially lead to a rally on the upside towards 1160-1180 levels.
However, a break below the mentioned support zone for HCLT, especially on a closing basis, would give the bears the upper hand and might result in additional selling pressure.
Sterling and Wilson Renewable rallied around 27% in the week. How to trade the stock now?
A significant development has occurred in the stock, as it has experienced a breakout above a falling trendline. This breakout was accompanied by a sharp surge in trading volumes, suggesting a potential change in the stock’s trend.
Given the recent breakout and change in trend, an ideal approach for traders could be to consider buying on dips. The stock has strong support in the 345-340 zone, indicating a potential buying opportunity if the stock retraces to this level.
Considering the breakout and support levels, there is a possibility that the stock may continue to move higher. Traders and investors might look for potential price targets around 400 or even 430 levels as the stock continues its upward trajectory.
With the key events of demerger and results behind us, what’s in store for RIL now?
Following the demerger, the stock experienced a significant correction and is currently trading near a crucial support zone at 2500. This support level is critical as it has the potential to act as a turning point for the stock’s price movement.
Despite the correction, the stock remains in a buy mode around the support levels, suggesting that investors may consider initiating long positions at this juncture. The support zone at 2500 could lead to a pullback rally on the upside, with potential price targets around 2650 or even 2700 levels.
The momentum indicator, RSI, is currently trading in the oversold territory. An oversold RSI often indicates that the stock has been sold off excessively, potentially leading to a price reversal. This oversold condition could provide the stock with the necessary momentum to initiate a rally from the current support levels.
Give us your top 3-4 trading ideas for the week.
BUY GAIL AT 111 , SL-106, TGT 120/124
GAIL has witnessed strong buying interest around the level of 106, which is acting as a support for the stock. This level has held firm in the past, indicating potential demand from buyers at this price. The stock is currently approaching a falling trendline, and a breakout above this trendline could accelerate the stock’s momentum in the upward direction. A trendline breakout is often considered a bullish signal, suggesting a potential reversal in the stock’s price movement. Additionally, a morning star pattern has formed at the support level, further confirming the bullish structure. The morning star pattern is a three-candlestick pattern, consisting of a large bearish candle, followed by a small candle indicating indecision, and then a large bullish candle. This pattern indicates a potential trend reversal from bearish to bullish.
BUY COROMANDEL AT 975 , SL-940 TGT 1030/1050
The stock has recently experienced a significant breakout from a consolidation phase on the daily and weekly charts. The breakout was accompanied by a surge in trading volumes, indicating strong buying interest in the stock. The momentum indicator, RSI, has given a positive crossover, confirming the presence of bullish momentum in the stock. Furthermore, there was a breakout from a falling trendline, signalling a change in momentum from bearish to bullish. This breakout strengthens the bullish case for the stock. The stock has a strong support level at 940, which is acting as a cushion for the bulls. As long as the stock remains above this support level, the bullish trend is likely to be sustained.
BUY BEML AT 1685 , SL-1634, TGT- 1775/1800
The stock recently experienced a consolidation breakout on its daily chart and has remained above a crucial moving average. Additionally, the RSI indicator shows a bullish crossover. However, there appears to be resistance at the 1800 level, while support can be seen at 1634