Upper end of the range for Nifty is 12,400 for the December series and 11,900 is the immediate support.
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How are market setups looking to you?
The Nifty and Bank Nifty had quite a positive month. Bank Nifty outperformed Nifty almost by 7% odd and managed to close in positive territory. The trading sessions on Nifty were mostly sideways this month wherein Bank Nifty was forming the higher tops and higher bottoms.
Nifty was in fact stuck within the 12,000-11,800 range which eventually broke out but then from higher levels, we again saw some profit-booking and 12,200 proved to be a strong resistance for this series.
Going forward, the rising wedge pattern that has been forming on the Nifty, particularly on the monthly charts, would be really important. It saw resistance at 12,350-12,400. In the December series, if it fails to provide the breakout above 12,400, we can see some heavy profit bookings. Rising wedge pattern can provide that kind of a heavy selloff, if those prices reverse from the upper end of the range. So, the upper end of the range for Nifty is 12,400 for the December series and 11,900 is the immediate support.
I am just hoping that we get there about 12,400. Failing to do so , can lead to some profit booking, consolidation or correction.
What is your view on Indiabulls Housing?
We saw a rally coming in yesterday’s trading session. In fact, we saw some heavy selloff from higher levels in today’s trading session. I would say that technically this stock has still not provided that kind of a confirmation. From hereon, we can see a good sustainable rally on the upside as far as Indiabulls Housing Finance is concerned. The volumes have gone up, the volatility has gone up and we really need to see some consolidation right now in Indiabulls Housing Finance before taking a bet.
As of now, the chart structure is not that bullish. I would say this stock is an avoid and wait for consolidation rather than go bottom-fishing now. It is not prudent to get into any trading activity in this stock as of now.
What are your top ideas for trade?
On yesterday’s trading session, we had seen a good breakout coming in PVR, which has provided a breakout from a falling channel. I would say a long consolidation has finally provided a breakout on the upside. Interestingly, with this breakout, the volumes have gone up, open interest has gone up and we have seen a good reversal coming in its momentum indicators on the daily chart, which has reversed from the zero line. This indicates that a fresh trend on the upside might just start from here on. In the short term, PVR can be bought for a target of Rs 1,900 with a stop loss of Rs 1,790.
Last week, we have seen the PSU bank index making a comeback and this index provided a very nice breakout from an inverse head and shoulders pattern, which is a bullish reversal pattern. The target comes to 2850-3090. Now if it moves towards these levels, I am sure that the banks on the PSU side will continue to perform quite well.
For next week, Bank of Baroda can be bought at these levels targeting around 112-114 on the upside. I would say that Rs 99-100 is a very crucial support zone. This stock too, like the PSU bank index, has provided a very nice breakout from its inverse head and shoulders pattern and on the monthly charts has formed a good falling-wedge pattern. Stocks forming this kind of base reversal patterns have a very high probability of an upside. Indicators are absolutely bullish as well. Based on these technical charts, both BoB and PVR can be bought.