The Nifty continued to grind lower towards the expected weekly support base around 11,800. On the daily scale, the rebound from the support zone could be a sign of relief for the bulls as the index formed a Bullish Harami formation on the daily scale. The pattern implications would be valid once the index clears the area above 11,940 from here on, else expect the muted grind to continue within 11,800-11,940 in the coming days. Also, the placement of the ADX 9 around 25 on the daily scale is not comforting & displays contradicting trend. Hence it’s ideal to focus on index only once it clears the minor range of 11,800-11,940 & trade for the wings placed at 12,150-11,700, once a clear directional momentum sets in again.
CMP: Rs 1,745
On the daily scale, the stock is close to its intermediate swing support zone around 1,700-17,20. The recent failure to sustain above 1,820 lead to a sharp decline and some brief consolidation which now looks like an Inverse Flag formation. The pattern exhibits a target around 1,655 close to its 200 DEMA zone which also coincides around 1,666. Hence, trading shorts could be considered with a stop at 1,765.
CMP: Rs 2040
TCS is now placed near the lower band of its broad consolidation range of 2,250-1,950. It has been oscillating within this range for more than 6 months now and provides a good reward to risk opportunity for portfolio longs. Its 20 bar EMA on the monthly scale is also placed near the same vicinity around 2,000. Hence, the stock remains a good buy on declines candidate within the IT sector & could be accumulated with a stop below 1,930 on the weekly closing basis.
Disclaimer: Analyst may or may not hold positions in one or more stocks