Nifty continues to remain vulnerable towards global volatility as it continues to drift lower post its weak start for the month. On the daily scale its proximity near its 200 DEMA alongwith its corresponding RSI value near the oversold zone warrants caution for fresh shorts. Historical evidence since august 2017 indicates that the RSI has also seen corresponding swings near to 35-33 zone & its current placement too compliments the bullish setup. Hence any loss of momentum in the ongoing down move from hereon could see a bear trap formation. Momentum traders should avoid fresh shorts at this juncture & await a concrete reversal formation to occur to build longs.
REPCO HOME FIN.
CMP: Rs 542
On the weekly scale the occurrence of a ‘Bullish Hammer’ supports the rebound from the lower end of the Broadening formation. The developing positive divergence on the 180 min scale alongwith the hammer in yesterday’s session indicates a likely reversal. Trading longs could be initiated above 555 with a stop below 520 for an intermediate upmove towards 610.
CMP: Rs 619
Secular uptrend on the monthly scale remains intact as the stock witnessed some consolidation during the month of January. The ongoing contraction now looks mature & the formation resembles a bullish pennant structure. We expect the stock to witness a breakout above 680 which could amplify the momentum towards 750 zone. Therefore, long positions are recommended with a stop below 600.30 for an initial target upto 710.
Disclaimer: The analyst may have positions in any or all the stocks mentioned above