Maruti, Power Grid & L&T can offer 6% or more upsides
In general phase of indecision results in whipsaw trades thus we expect a rise in the volatility is likely.
By ET CONTRIBUTORS |
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By Sandeep Porwal
Technical analyst- Inst. desk, Ashika stock broking
Where we are: Status quo continues at the Dalal street, as Nifty despite multiple attempts failed to stage a breakout of the sideways trading range. The level of 12000 remains a strong psychological resistance for the index. On the other hand, Nifty Bank remained buoyant and staged a relative outperformance in the week gone by while the IT index which was trading sideways also declined sharply in Friday’s trading session. Sectoral positioning still indi-cates market participants are not risk-averse at this point.
What is in store: On the weekly scale formation of the “Doji “candlesticks pattern for the last three weeks indicates indecision and absence of a directional trigger. The index failed to stage a breakout of its prevailing range i.e. 11800-12000. However, price after a reversal from its intermediate high now stays near the 61.80% Fibonacci ratio of the above range; thus, some respite may take place while for a directional trigger one must wait for any decisive sign of range breakout. The level of 11800/11700 remains a key support pivot in the short term. In the Nifty Bank index from the relative strength point of view and throwback to key breakout zone, the addition of a long position is advised on a dip up to the 30800 (Spot) level.
What traders can do: In general phase of indecision results in whipsaw trades thus we expect a rise in the volatility is likely. On the stock-specific front, we recommend the addition of longs in Maruti, Power Grid & L&T expecting upside of 6% & more with stop loss of 3% while follow-up correction in Tata Elxsi may take place.
Technical analyst- Inst. desk, Ashika stock broking
Where we are: Status quo continues at the Dalal street, as Nifty despite multiple attempts failed to stage a breakout of the sideways trading range. The level of 12000 remains a strong psychological resistance for the index. On the other hand, Nifty Bank remained buoyant and staged a relative outperformance in the week gone by while the IT index which was trading sideways also declined sharply in Friday’s trading session. Sectoral positioning still indi-cates market participants are not risk-averse at this point.
What is in store: On the weekly scale formation of the “Doji “candlesticks pattern for the last three weeks indicates indecision and absence of a directional trigger. The index failed to stage a breakout of its prevailing range i.e. 11800-12000. However, price after a reversal from its intermediate high now stays near the 61.80% Fibonacci ratio of the above range; thus, some respite may take place while for a directional trigger one must wait for any decisive sign of range breakout. The level of 11800/11700 remains a key support pivot in the short term. In the Nifty Bank index from the relative strength point of view and throwback to key breakout zone, the addition of a long position is advised on a dip up to the 30800 (Spot) level.
What traders can do: In general phase of indecision results in whipsaw trades thus we expect a rise in the volatility is likely. On the stock-specific front, we recommend the addition of longs in Maruti, Power Grid & L&T expecting upside of 6% & more with stop loss of 3% while follow-up correction in Tata Elxsi may take place.
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
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