The Nifty continued its upward trajectory post 100 DEMA (11,542) acted as support for multiple trading sessions. However, the index was unable to surpass the 20 DEMA (11702). Daily RSI breached above its signal line hence any move above 50 levels might attract further upside momentum.
Seasonality data indicates that historically July has yielded positive returns in seven out of 10 instances since 2009 with an average return of close to 3 per cent and a bullish reversal from here-on could result in sharp an upside momentum kicking in while a move below 11,600 levels would commence a corrective move targeting the gap support placed around (11,406-11,426). It’s prudent to book profits for any existing shorts and wait for upside momentum to kick-in in coming sessions to build longs with a stop placed below 11,600 as presumption of reversal for larger move on the upside remains intact.
Stock: Hindustan Petroleum Corporation Limited
CMP: Rs 296
The stock breached its 20-day long consolidation between the range of (280-294), closing above its 20 & 50 DEMA. Breach above 50 WEMA and pick-up in momentum as Daily RSI surpassed its signal line and 50 levels in the previous trading session. Momentum oscillators have registered new extreme highs suggesting commencement of new impulse on the upside targeting Rs 309 price confluence zone. Short-term traders can buy the stock with stop placed below 290 levels for 309 to be obtained in coming sessions.
Disclaimer: The analyst may have positions in any or all the stocks mentioned above.