Usually, when the momentum readings are in such overbought zone and market approaches resistance, it leads to either a price-wise or a time-wise correction in short term. Hence, we advise that traders should avoid getting carried away now and avoid aggressive buying at current levels. Infact, booking profits on existing longs and taking some money off the table is also recommended. Having said that, one should not give less importance to the price structure which has not yet given any signs of reversal. Hence, this week, focus would be more on the price action and we would wait for indications from that front.
The banking index, which has resumed its rally and has outperformed in the last couple of months, has now been facing resistance around the 31,000-mark. As far as Nifty levels are concerned, 13,770-13,800 is the immediate resistance as per the retracement theory mentioned above. If the index moves beyond this range, then it would eye the 14,000-mark for the first time ever. On the flipside, 13,650 is the immediate support which, if breached, could result in some profit booking and drag the index towards 13,500-13,470.
Post the recent corrective phase, the prices have formed a support base near its '200 DMA'. In the last one month, the stock has formed a 'Higher Top Higher Bottom' structure which indicates a resumption of the uptrend. The momentum oscillators are in positive zone indicating positive structure. The overall 'Nifty Pharma' index too looks positive on the charts and thus, we believe this stock could rally higher in the near term. Hence, we recommend to buy the stock for a target of Rs 1,020 in coming weeks. The stop loss can be placed at Rs 945.
This stock has recently seen an upmove supported by good volumes. On the weekly charts, prices have given a breakout from a 'Cup and Handle' pattern which is a bullish pattern. The long term chart structure too looks positive and hence, we recommend to buy the stock for a target of Rs 133 in coming weeks. The stop loss can be placed at Rs 115.
Disclaimer: Sameet Chavan is Chief Analyst- Technical & Derivatives at Angel Broking. The analyst may have positions in one or more stocks. Views are personal.
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