Nifty remains locked in within the ‘Broadening’ formation on the 60 minute scale. Even on the daily scale it had been forming narrow ranged bodies and has slipped below its 5 EMA. The cool-off could push the index lower towards 11,700 once below 11,840. On the other hand, Nifty Bank remains relatively stronger and is helping Nifty retain some strength despite the overbought state. It’s ideal to retain a long-short strategy and focus on stock specific action until the index completes its corrective phase.
Stock: General Insurance Corporation of India (GICRE)
CMP: Rs 270
GICRE has been oscillating within the upward rising channel formation since it witnessed a breakout from the accumulation zone around 230. The recent pullback within the pattern provides yet another opportunity to add longs as the stock is now placed near the retracement support zone of its prior impulse. We expect the stock to retain its secular upmove and revisit its swing resistance zone around 330-335. Longs could be added with a stop below 252.
Stock: Ujjivan Financial Services Limited (UJJIVAN)
CMP: Rs 268
The stock remains under short- short unwinding cycle as the lower top lower bottom sequence continues on the absolute price scale. The recent consolidation near its swing support exhibits an Inverse Pennant formation which looks mature for a breakdown. With highest PE OI standing at 270 & fresh shorts addictions in the last two days the probability of a breakdown remains high. It has broken below its 10 DMA facing crucial resistance around 283/285 levels. On the downside, it can test 250-240 in the coming days.
Disclaimer: Analyst may or may not hold positions in one or more stocks