Trend is negative but don’t rule out the possibility of a counter pullback towards 10,630.
The Nifty in the previous session ended 0.19 percent higher at 10,536.70. It reacted up from day’s low 10490.55 towards ending the session with a Spinning top candle. However, critical resistance of 10,560 is still intact on the upside and needs to be broken out for a pullback towards 10,630.Spinning top candle after five consecutive days of down fall implies indecision among traders. So, a pullback beyond 10,560 towards 10,630 is not a distinct possibility. On the flipside, breaking down 10,500 may unfold next leg of downfall towards 10,420.
On the Nifty hourly chart; it is still trading below 200 EMA placed around 10,620 levels. Hence, the bearish bias is still intact. Flattened ADX coupled with recovery in RSI from its oversold zone might cause a pullback towards 10,630. However, breaking out immediate critical resistance placed around 10,560 is necessary.
Nifty patterns on multiple time frames show; currently it is trading below both the critical levels placed around 10,560 and 10,630. Hence, weakness is likely to persist. However, we don’t rule out the possibility of a counter pullback towards 10,630.
The Bank Nifty in the previous session ended 0.1 percent lower at 25,777.70. It ended the session with a Doji candle. Critical support around 25,700 is still intact. Pullback is likely to find tough resistance around 26,100.
Based on thorough technical study, the research firm recommends Punjab National Bank which can give up to 12 percent return in the near short term:
Punjab National Bank | Rating: Buy | Target: Rs 90, stop loss: Rs 75, Return: 12%
After a prolonged downfall, the stock rebounded from the critical support around Rs 75 levels. It looks extremely oversold on the daily chart and ended the session with a bullish body candle.
Based on above mentioned observations, the firm recommends PNB as a buy on dips for the short term upside target of Rs 90.
Disclaimer:-The views and investment tips expressed by investment experts are their own. Ripples Advisory advises users to check with certified experts before taking any investment decisions.
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