Post a very long weekend our markets started with a huge gap down opening but it just seemed that our markets are adjusting to the global move seen during the break. The broader markets were still buzzing however on Tuesday we witnessed a sharp sell-off during the last hour to retest levels around 16800. This fall once again didn’t sustain and recovery during the mid-week resulted Nifty to end weekly expiry around 17400. Everything looked back to normal but Friday again we saw selling post a gap down opening to eventually end the week with a loss of 1.74%.
It was definitely a roller coaster move for our markets and traders were baffled to understand the trend. The same can be seen in the candle stick pattern of the weekly chart as a ‘Doji’ pattern is formed. As per the pattern, 16800 – 17400 is the range for the benchmark and the next trending move can only be seen on a sustain trade beyond it. The way markets closed on Friday especially the Bank Index, things definitely don’t augur well for the bulls. We would still have a close watch around the 16800 – 17000 mark to see how things pan out around this zone however a break below the same can trigger some rough time for our market in the near term. On the higher side, 17400 is the stiff resistance and as long prices don’t conquer it, any bounce are likely to get sold into. For the bank index we witnessed a bearish gap this week that is adjacent to the bullish gap seen couple of weeks back and thus a bearish island reversal gap formation can be seen. As per the gap analysis, the bank index is likely to remain under-pressure as long the bearish gap around 37123 – 37264 is not filled.
Taking all the above picture into consideration, we sense market is likely to remain choppy and hence aggressive bets should be avoided and stock selection as well need to be very selective going ahead.
NSE Scrip Code – UBL
View – Bullish
Last Close – Rs. 1545.6
Justification – After a decent correction from the Nov 2021 swing high; the stock prices have now finally changed the trend to uptrend as it has started moving in a ‘Higher Top Higher Bottom’ price formation. On Friday, prices exactly took support on ascending trend line support and moved sharply higher to engulf last four sessions. The upmove is supported with huge increase in volume. In addition, we are witnessing a bullish crossover in momentum oscillator i.e. RSI with its smoothened moving average. We sense this counter can perform even in the choppy broader market and hence we recommend a buy for a near term target of Rs. 1640. The stop loss can be placed at Rs. 1495.
2. NSE Scrip Code – CEATLTD
View – Bullish
Last Close – Rs. 1185.30
Justification – This April month has been a spectacular for this Tyre stock as the prices have clocked more than 27% this month and the price formation indicates that there’s much more in store in the near term. On the daily chart, stock prices have confirmed a bullish Flag pattern that is considered as a strong continuation pattern. The pattern which includes a health consolidation supports buying in this counter at current levels as well. Volume analysis indicates strong volumes during upmove as compared to volume during down moves thus indicating accumulation in this counter. Thus we recommend a buy for a near term target of Rs. 1275. The stop loss can be placed at Rs. 1139