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Momentum plays: How to trade NiftyFMCG index, Dabur, HUL, ITC, Marico

Here are key technical levels you need to keep a tab on

Avdhut Bagkar  |  Mumbai 

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Illustration by Binay Sinha

The current chart formation indicates that the NiftyFMCG index is nearing the support of 30,240 levels. The daily chart with "Higher highs, higher lows" formation indicates a bullish trend. Theoretically, the pattern is identified as “Rising Channel Pattern”, which envelops prices in two trendlines. The rise in prices eventually sees two trendlines in rising direction; it is upward rising trend line and lower rising trend line. CLICK HERE FOR THE TECHNICAL CHART

The immediate support comes at 50 days moving average (DMA) of 30,080 and resistance falls at 30,510, its high of today.

RISING CHANNEL PATTERN LEVELS
DATE Upward rising trendline DATE Lower rising trendline
22 October 2018 29116 31 October 2018 27795
3 December 2018 30526 11 December 2018 28960


The above table illustrates the levels of formation. At current levels of 30,310, the index is closer to the lower rising trendline located at 30,240 levels. On the higher side, the upward rising trendline is located at 32,350 level.

Key stocks on the charts:

India : The daily chart shows formation of “Inverse Head & Shoulder” with breakout above the of Rs 426. The daily moving average, 50DMA and 100 DMA is in the process of a positive crossover, indicating strong strength and positive sentiment, charts suggest. The said averages are currently placed at Rs 418 and Rs 422 respectively, and provide immediate support for the stock at those levels.

Hindustan Unilever (HUL) : The stock has a trendline resistance at Rs 1780 level together with 50 days moving average (DMA) at Rs 1775 in the daily chart. The lower side, support falls at Rs 1690, its 100 DMA. The overall trend indicates cautious view as daily chart evolves with “Head and Shoulder” pattern with a necline at Rs 1740. A continuous trade below the said level may lead to a negative trend.

: The daily chart forms “Symmentrical triangle pattern” with breakout above Rs 285 level. Today's decline of 1.50 per cent is around the same level. The stock is retesting the crucial support level of breakout trendline currently located at Rs 287 level, as per chart. The 50-day moving average is placed at Rs 282 level, which also is its immediate support level.

Marico: The stock has been closing weak from the last five sessions. Currently, it is trading with a cut of 1.40 per cent, which eventually will add one more negative session. The major support comes in at Rs 360 levels, the immediate support comes at Rs 367, its 50 DMA. The resistance comes at the high of these five negative candles, which is Rs 385.10.

: The stock is consistently trading in the range of Rs 1355 – Rs 1290 from the past one month. Any breach of the range will determine the next course of action.

First Published: Tue, January 22 2019. 12:50 IST
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