Nifty50: Uptrend likely once it breaches 19,700; support seen at 19,300

A level below 19,300 would be considered bearish sign in Nifty for the short term, says Vinay Rajani, senior technical and derivative research analyst at HDFC Securities

View on Nifty

From the recent swing low of 19,296, Nifty registered a pullback of 340 odd points in the last four trading sessions. Nifty has reached the crucial resistance of 20 days SMA and downward sloping trend line, adjoining the highs of July 20 (19,991), July 27 (19,867) and August 1 (19,795).

These multiple resistances are coinciding around 19,700 levels in Nifty. Any level above 19,700 would resume the primary uptrend, while a level below 19,300 would be considered bearish sign in Nifty for the short term. 

Stock recommendation

Buy Bank of Maharashtra (last close: Rs 36.25) | Target: Rs 40 | Stop-loss: Rs 34

The stock price has broken out from the narrow consolidation, which it held for the last three weeks. The price breakout is accompanied by jump in volumes, while it is placed above all important moving averages. Indicators and oscillators, too, have turned bullish on the weekly charts.
 

Buy Tata Communications (last close: Rs 1,684) | Target: Rs 1,803 | Stop-loss: Rs 1,611

The primary trend of the stock has been bullish with higher tops and higher bottoms on the weekly charts. Stock price has been finding support on its 20 DEMA despite showing a  throwback fall towards its previous top support. ADX Indicator, meanwhile, has turned bullish. Stock is placed above all important moving averages, which indicates bullish trend on all time frames.

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Disclaimer: Vinay Rajani is a senior technical and derivative research analyst at HDFC Securities. Views expressed are personal.