Expect 9,050-9,000 to act as a strong support zone: Sacchitanand Uttekar

Nifty outlook & trading ideas by Sacchitanand Uttekar, AVP - Research & Data Analysis at Tradebulls

Nifty Outlook:
 
Nifty witnessed a steady decline since the Hanging man formation on 5th April 2017. The occurrence of a ‘Doji’ at the retracement support zone augurs well for the termination of the ongoing decline.

With the expectation of the broader market trend remaining intact a sustained close above the ‘Doji’ formation would confirm the reversal. In case if the correction continues we expect 9,050-9,000 to act as a strong support zone in the coming week. With the expiry week just around the corner & the index approaching the lower end of the trading range, we recommend adding longs with a stop below 9,000 with an expectation of a rebound towards the upper end of the trading range placed near 9,300-9,400.

 
Stocks
 
AMARA RAJA BATTERIES - BUY
STOP LOSS – Rs 855    
TARGET – Rs 905
 
Amara Raja Batteries has been consolidating within the Channel formation. Bullish reversal formation has occurred at the retracement support of 61.8% of its previous impulse wave. Rising volumes compliment the bullish setup. Short term traders could add fresh longs with an expectation of a reversion back towards the upper end of the channel placed around 910. We recommend longs with a trading stop on a closing basis below 855 for an initial target up to 905.
 
INDIA CEMENTS - BUY
STOP LOSS – Rs 165

TARGET – Rs 195
 
The recent breakout from the continuation pattern augurs well for the secular upmove to remain intact. Even on the long term scale a ‘Rounding Bottom’ formation is in progress. As the recent breakout is well supported with volumes we expect the ongoing momentum to extend towards 195. Hence longs could be added with a stop below 165.
 
Disclaimer: The analyst may have positions in any or all the stocks mentioned above.