By Rohan Patil
Bulls finally showed some strength after an almost 9 per cent drawdown in the last seven weeks and formed a bullish engulfing candlestick pattern on the weekly time frame. The nifty has taken strong support of its horizontal trend line which is placed at around 16100 levels and has also given a gain of above two per cent on the weekly chart.
The volatility gauge indicator India VIX is showing a sideways movement from the last few trading sessions and is founding a strong resistance at 30 levels. India VIX on this week has drifted more than nine per cent and closed at 25.34 but still reading above its 21 WEMA which is placed near 20 levels.
The momentum oscillator RSI (14) has formed a double bottom pattern near 30 levels which is the oversold level for the oscillator and further that witnessed a sharp rally in the prices.
The upper band of the Nifty is currently placed at 17000 level and the immediate bottom for the nifty is made near 15600 levels. We are expecting the prices to trade within this broad range amid volatility on the cards.
Bank Nifty support at 33150
The bank nifty has made an inverted cup and handles formation on the weekly chart and has taken a strong support near its horizontal trend line placed near 33800 levels. This week the prices have made a low of 32155 but made a smart recovery after forming a V shape reversal rally and closed at 34546 with a gain of close to half percent on the weekly chart.
The banking index has closed marginally above its 50-week exponential moving average which will act as an anchor point in the coming weeks. The momentum oscillator RSI (14) has drift near 40 levels and is very close towards its oversold territory.
The immediate support for the Nifty bank is placed at 33150 levels if prices don’t respect these levels then 32500 is a possible level in the coming weeks. The upper band is capped near 36000 levels; a successful close above the same will open the gate for 37000 levels.
CIPLA: BUYTarget: Rs 1115 | Stop Loss: Rs 1000Return: 06.80%
The prices were trading in a rectangle pattern for the past seven months and have formed a trend line resistance at 1000 levels.
CIPLA has broken out of a rectangle pattern at 1044 levels on 11th 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 weekly time frame, which is positive for the prices in the near term.
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 which indicates positive momentum will like to continue ahead.
AMBUJA CEMENT: BUYTarget: Rs 318 | Stop Loss: Rs 279Return 08%
After a continuous fall in the stock prices have found support near its 200-week exponential moving average and in terms of candlestick counter has formed a bullish hammer pattern on the daily time frame.
On the daily chart momentum oscillator RSI (14) is reading at extremely oversold levels which is below 30 and the sharp bounce back from the current levels cannot be ruled out. We have also seen an above-average volume activity from the last couple of sessions indicating buying at lower levels in the counter.
(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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