Nifty continues to consolidate post attaining new lifetime highs as profit-booking at higher levels have kept upside capped on immediate basis. 20-DEMA (Double Exponential Moving Average) continues to act as immediate support on the downside currently placed at 11,810. Weekly derivative data indicates sustained put writing at 11,800 strike which also coincides around the support zone of its 20-DEMA.
Daily RSI (relative strength index) has still been stable above 50; however, it is unable to move past its signal line that could attract upside momentum. We expect the index to retain itself within the range of 11,660-12,140 for few more weeks. Hence, mean reversion action is likely to exist inside the said range. Traders are advised to maintain long short strategy within the said range until meaningful breakout or pattern and volume confirmation is visible in the coming sessions.
Stock: Jubilant FoodWorks
CMP: Rs 1,333
Occurrence of consecutive “inverted hammers” on the weekly scale around Rs 1,300 support zone along with “bullish hammer” formation on the daily scale indicates exhaustion of downside momentum. On hourly scale, the stock is moving higher within upward rising channel. Short-term traders can initiate longs with closing stop placed below Rs 1,298 levels for a commencement of a larger move on the upside targeting Rs 1,380 and Rs 1,420 levels.
Stock: Shriram Transport Finance
CMP: Rs 1,068
The stock is under persistent pressure since swing high at Rs 1,218 levels and witnessed fresh downside momentum post breakdown from pennant formation. It is expected to continue its downward momentum targeting Rs 1,033 that happens to be gap support in the coming sessions. Fresh put writing at Rs 1,100 strike along with negative price action supports the overall view of continuation of bearish move in the stock. Short-term traders can initiate shorts with stop placed above Rs 1,086 levels for the test of Rs 1,033 gap support in the coming sessions.
Disclaimer: The analyst may have positions in any or all the stocks mentioned above.