Nifty outlook and top trading ideas from Sacchitanand Uttekar, DVP - Technical (Equity), Tradebulls Securities.
The index was unable to breach above its 200 DEMA placed at 10750 levels post bullish hammer candle formation in the previous session. Daily RSI breached below its significant support line and is trading below 50 levels indicates weakness ahead till 10500 levels. With the appearance of a large downside candle post-breach of narrowing pattern on the downside; close beyond 200 DEMA is a requisite for further upside that might test the earlier pattern resistance placed at 10840. A cautious approach is necessary as volatility is expected to expand further on the back of Federal Budget and expiry this week. Traders should be vigilant for basing out formation at lower levels while upside move back inside the pattern above 10840 could accelerate the move on the upside targeting 10950 resistance levels.
CMP : Rs 678.65
The stock has lost more than 30% since August 2018 life highs around 990 levels and is showing signs of exhaustion of downtrend. Stock witnessed bullish pattern formation similar to “Morning Star” on daily scale suggesting exhaustion. Bullish candle post Doji formation in the previous session indicate indecision at lower levels and further upside in stock will trap shorts leading to accelerated move on the upside. Daily RSI is crossed above 30 oversold levels resting at signal line resistance. Stock can be bought with stops place below 663 price confluence zone for technical bounce till 710 & 723 levels in coming sessions
Stock: BATA INDIA
CMP : Rs 1,099
Bata India witnessed a ‘Double Top’ formation on the daily scale around 1180 zone. Also, the weekly RSI has been denoting a negative divergence since last week & the recent convergence with the trigger line confirms the bearish signal. The stock could witness a pullback in the coming sessions which could be utilized to create fresh shorts around 1110-1120 zone with a stop placed at above 1165 on a weekly closing basis. The recent fall below 1100 mark seems to have opened the gates for a decline towards its 20 WMA support zone placed around 1055.
Disclaimer: The analyst may have positions in any or all the stocks mentioned above.