Useful for staying jerky with negative bias, support at 15600; Buy Raymond, sell Titan shares to make a profit

By Nagaraj Shetti

The jerky move continued in the market on Wednesday, with NSE Nifty 50 closing the day 32 points lower amid volatility. After opening positively, the market has started to recover upwards since it opened. The gradual upward movement lasted for most of the session and selling pressure emerged from the highs towards the end. The opening hole at the bottom is completely filled.

After opening lower, a long bull candle has formed on the daily chart. This is the second back-to-back pattern in the last two sessions, signaling range-bound movement in the market. Following Monday’s false upward breakout from 15800-15900 levels, Nifty has fallen gradually in the last two sessions, which could be a positive indication for the bulls to make a comeback from the lows. Normally, such range moves from near major resistances eventually result in a sharp upward bounce from the lows.

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NSE Nifty 50, BSE Sensex

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A small amount of positive sequence such as higher tops and bottoms is intact on the daily chart and the current weakness could be in line with the formation of a new higher bottom of the sequence. There is currently no confirmation of a higher ground reversal.

Nifty’s short-term trend remains choppy with negative bias. The current range-bound movement in Nifty could continue for the next 1-2 sessions and immediate support can be viewed around 15600-15650 levels. On the other hand, a decisive move above the 15850-15900 levels is likely to provide a lasting benefit to the market.

Buy Raymond

The downward trend of the past three weeks seems to have reversed in this textile stock (Raymond) according to the weekly timetable chart. The formation of a negative candle with a long shadow lower from last week and a sustained upward jump so far point to a near-term bottom reversal for the share price around Rs 796.55. The greater degree of positive order, such as higher highs and lows, is intact and the stock price has held up above the immediate support of the weekly 10 and 20-period EMA. Weekly 14-period RSI shows a positive indication.

Buy can be started in Raymond at CMP (907.80), add more to dips up to Rs 880, wait for the upward target of Rs 1005 in the next 3-4 weeks. Place a stop loss of Rs 850.

Sale Titan Company July Future

The stock price (TITAN) has been in a sharp downward trend for the past few months. We observe a formation of negative series such as lower tops and bottoms over time. An attempt from last week’s upward jump has been reversed with a decline so far this week. Volume started to grow during the downward movement in stock prices. The 14 weekly RSI has fallen around 40 and is expected to break below that. Therefore, one can expect a continuation of the downward momentum in the future stock price.

One could look to sell Titan July Future at CMP (Rs 1933.45), add more to Rs 1985 and wait for the downward target of Rs 1760 in the next 3-4 weeks. Place a stop loss of Rs 2035.

(Nagaraj Shetti, Technical Research Analyst, HDFC Securities. Opinions expressed are those of the author.)

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