Nifty witnessed a bearish move on Wednesday closing once again around ongoing contracting pattern support this January series. The pattern support is being tested for the fourth time and every test has attracted strong follow-through buying at earlier instances on 4th & 14th January. The Triangular pattern is in its final stages as pattern apex approaches and is matured for a break. Trend strength indicator is approaching is support zone around 48 levels in conjunction with pattern support augurs well for a similar upside witnessed on pattern support at earlier instances. The index has not witnessed any Bearish formation yet near its resistance zone while the support has witnessed reversal formation at every key intersection. Traders should aggressively long the index once a decisive breach above 10950 is witnessed for 11140 target with a stop placed below pattern support of 10700.
Stock: CENTURY TEXTILES
CMP: Rs 883.35
The stock is consolidating its previous gains since the new impulse commenced on 11th Dec 2018. Daily RSI is recovering from its support zone around 45 levels and is expected to breach above the signal line in next few trading sessions. A similar test of oscillator yielded a gains form 830 lows to 940 highs in December series. The stock formed a bullish harami formation and along with a bullish oscillator, formation suggests the stock is expected to move higher in coming trading sessions. Traders can long the stock at current price levels with stops placed below 858 levels for upmove targeting 919 levels in coming sessions.
Stock: YES BANK
CMP: Rs 197.25
Stock witnessed follow thorough upmove after bullish hammer formation 22nd January post recent correction from 209 highs. Daily RSI bounced post-test of support line around 48 levels recovering back above 50 levels. Recent positive cross over of 13 & 21 DEMA and rest of the same with hammer formation bodes well for further upside in the stock targeting 220 levels. Stock can be bought with a stop placed below 182 (consolidation support) in anticipation of upmove till 220 levels in coming sessions.
Disclaimer: The analyst may have positions in any or all the stocks mentioned above.