By Rohan Patil
The bulls are back in action after a week of consolidation and prices closed above their previous week’s high with a gain of three percent on the weekly closing basis. After eight days of consolidation, the benchmark index Nifty50 breaks the conjunction zone on the higher side and witnessed a bullish breakout. India’s VIX drift below 20 levels and closed 21 percent lower on the weekly chart. India VIX has closed in red for seven consecutive days this structure indicates gradual decreases in the volatility. April derivatives series has historically proven to be positive for the Indian stock market. The foreign investors have entered the April derivatives series with an increase in long positions on the index futures.
BANK NIFTY
The first day of the new financial year started with a bang for the banking index and prices closed above 37000 with a gain of more than one and a half percent for the day and closed near five percent for the week. On the daily chart Bank, Nifty was facing a stiff resistance of a moving average cluster at around 36200 – 36600 levels. Bank Nifty on 1st April witnessed a strong breakout above its moving average cluster and closed above the same. The index has also closed above its four-week high indicating bulls gearing an action.
If we draw a trend line on momentum oscillator RSI (14) it was given an inverted head & shoulder pattern breakout above 55 levels with positive crossover on the daily time frame. MACD has just crossed above its line of polarity on the daily chart again indicating a possibility of the continuation of a bullish trend. On the higher side, 38000 is acting as a strong resistance for the Bank Nifty, if prices close above that level then there will be a breakout on the broader time frame in the banking index. Meanwhile, the immediate support for the banking index is placed at 35800 levels.
BHARTI AIRTEL: BUY| CMP: Rs 758.50 Target Rs 808 |Stop Loss Rs 730Return 06.50%
The prices were trading in a rectangle pattern for the past four months and have formed a trend line resistance at 733 levels. BHARTI AIRTEL has broken out of a rectangle pattern at 755 levels on 29th March and the prices have registered a decisive breakout that suggests a change in the trend from sideways to upside. Stock is trading above its (21, 50 & 100) – day exponential moving averages on the daily time frame, which is positive for the prices in the near term. Post breakout prices are consolidating from last couple of days above its trend line support. The MACD indicator is reading above its centerline with a positive crossover above its signal line. Momentum oscillator RSI (14) is reading above 60 levels and has given a horizontal trend line breakout near 60 levels which indicates positive momentum will like to continue ahead.
PAGE IND: BUY| CMP: Rs 43147 Target Rs 45530 |Stop Loss Rs 41800Return 05.50%
Page Industries was trading within the falling wedge pattern for past more than 2 months and has formed a trend line resistance 42500 levels. Stock on the 31st March witnessed a bullish breakout above its trend line resistance with above average volumes activity. Counter is moving in a rational uptrend with higher high higher bottoms formation on the weekly time frame. Within the uptrend, the stock is continuously taking support and bouncing off the 20-day SMA. In the current week prices have almost engulf its previous red candle which indicates a strong come back from the bulls. The RSI on weekly has witnessed a range shift where indicator is reading in a range from 50 to 70 levels.
(Rohan Patil is a Technical Analyst at Bonanza Portfolio. Views expressed are the author’s own. Please consult your financial advisor before investing.)
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