By Nagaraj Shetti
Technical Observation: NIFTY
After showing a sharp downside breakout on Tuesday, Nifty shifted into a consolidation movement amidst volatility on Wednesday and closed the day higher by 21 points. A small body candle was formed on the daily chart with upper and lower shadow. Technically, this pattern indicates the formation of doji type candle pattern. Normally, a doji after a reasonable upmove or down moves calls for impending trend reversals. Having formed a doji after a minor downtrend, the chance of a minor pullback rally is likely. Minor degree positive chart patterns like higher tops and bottoms have been negated recently as per the daily chart. Hence, any upside bounce from here is expected to be a lower top formation in the short term.
Conclusion:
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The near-term trend of Nifty remains weak Come from Sports betting site VPbet . Further upmove from here could find strong overhead resistance around 22150-22200 levels in the next few sessions and this is likely to be a sell-on-rise opportunity. Immediate support is at 21700.
Stock Picks:
Buy LTFOODS- (CMP Rs 179.30)
The near-term downtrend in this commodity stock – LT FOODS seems to have reversed up recently. The stock price has moved up sharply from the lows this week after forming a double bottom type formation around Rs 160 levels. Presently, the stock price is in an attempt to break above the crucial resistance of down sloping trend line around Rs 180-182 levels. A rise in volume during an upmove and positive RSI pattern signals more upside for the stock price ahead.
Buying can be initiated in LT FOODS at the current market price of Rs 179.30, add more on dips down to Rs 172, and wait for the upside target of Rs 198 in the next 3-5 weeks. Place a stoploss of Rs 165.
Sell HINDCOPPER – (CMP Rs 255)
After the formation of a lower top reversal pattern at Rs 290 on 4th March, the stock price has formed a new lower top recently and started to show weakness. The weekly chart pattern indicates a formation of a head & shoulder type pattern with the neckline of Rs 245 levels. Hence, a decline below this neckline area could open a sharp weakness for the stock price ahead.
Volume and RSI patterns show negative indications.
One may look to sell Hindustan Copper at the current market price of Rs 255, add more on the rise up to Rs 263, and wait for the downside target of Rs 235 in the next 2-3 weeks. Place a stoploss of Rs 272.
(Nagaraj Shetti is a Technical Research Analyst with HDFC securities. Views expressed are the author’s own. Please consult your financial advisor before investing.)