Going by the famous idiom ‘all’s well that ends well’, the bulls must be a bit relieved now. Fortunately, at the start of the week, we carried our bullish inclination after observing a positive divergence in RSI Smoothened on the hourly chart of Bank Nifty previous Friday. This anticipation played out well and with weakest link (banking space) taking the charge, the Nifty got elevated beyond 9,500 before anyone could realise. Nifty has now reached our immediate target of 9,450 - 9,500, but, the way charts are shaped up, we expect the Nifty to test the higher end of the downside gap area of 9,532-9,731, created on May 04, 2020 (or may even head higher). On the flipside, 9,450 followed by 9,380 would now be seen as a sacrosanct support.
Disclaimer: Sameet Chavan is Chief Analyst- Technical & Derivatives at Angel Broking Ltd. Views are person
As we have just alluded, this week’s rally is clearly propelled by the banking space and historically it’s proven that whenever the banking conglomerates start participating in any rally, it is considered to be a robust one. Hence, traders should look to use declines to go long and ideally the stock centric approach would fetch better trading opportunities as well as the higher potential gains.
NSE Scrip Code – Vinati Organics
View – Bullish
Last Close – Rs. 1,016.60
– The entire ‘Chemical’ space has been doing well for quite some time now. And again, after a brief pause, they have resumed their higher degree uptrend. After undergoing a strong corrective phase in the March month mayhem, ‘Vinati Organics’ has given a stupendous recovery from sub-700 levels. Recently, the stock price consolidated around its ‘200-day SMA’ for nearly three weeks; but, on Friday, finally due to strong buying interest, the stock went on to traverse this hurdle with some authority. Since, it’s backed by the humongous volumes, we recommend going long for a positional target of Rs.1,095 in coming days. The stop loss can be placed at Rs. 976.
2. NSE Scrip Code – Kajaria Ceramics
View – Bullish
– The last four months have been terrible for this counter as the stock price corrected nearly 50 per cent from its January highs. Last week, this correction somehow got arrested around its multiyear supports and in the last couple of trading sessions; the stock price witnessed a strong surge. Now, looking at the daily chart, we can see the stock price closing convincingly above 20-day EMA for the first time in the last three months. In addition, the weekly chart depicts a confirmation of a Bullish Hammer pattern at a strong support zone. Thus, one can look to buy on minor dips for a target of Rs.378 in coming weeks. The stop loss can be placed at Rs. 316.