Last week nifty ended with a “Hanging Man” pattern on the EOD chart, Suggests buyers need to be cautious at the upper level. Keep strict stop loss at 10700 for longs. Bank Nifty is likely to outperform Nifty this week. Also one should keep an eye on Financial stocks this week as they are likely to outperform.
Although the market traded in a narrow range of 400 points throughout last week, Index price has been gradually going higher. The Index price extended the upward move for straight fifth week.
Last week Nifty 50 closed 1.24 percent higher, the mixed performance was seen from other major indices. Financial benchmarked performed well. Throughout the week market breadth has remained positive and PHARMA, IT & FINANCIAL scripts topped the market followed by AUTO, ENERGY & MEDIA.
In the coming week focus will be on the large-cap giant as Axis Bank, Bajaj Finance, HUL, LT, Asian Paint, ITC earnings announcements scheduled throughout the week. Needless to say, global cues and updates related to COVID-19 will also remain on their radar.
Technical View on Nifty and Bank Nifty
“Hammer on top or Hanging Man” formed on the nifty weekly chart.
Hanging Man, The hanging man represents a potential reversal in an uptrend. It indicates that buyers have lost their strength. While demand has been pushing the stock price higher, on this day, there was significant selling. While buyers managed to bring the price back to near the open, the initial sell-off is an indication that a growing number of investors think the price has peaked.
Many believe it’s a key piece of evidence that market sentiment is beginning to turn. The strength in the uptrend is no longer there.
Trend – Hanging man indicates buyers need to be cautious at higher levels. 10980-11080 would be a crucial level for the market. Any closing above 11080 will fuel the rally for the next 300-400 points else may consolidate in a range. On a daily chart, it has been trading above all the major averages, which further indicates bull dominance in the market ahead. Technically above 10500, it has a target of 11000. Immediate resistance lays down at 11080. Any closed above 11080 will fuel it for the next target of 11280-11480.
According to Open Interest Data, Maximum Call open interest stand at 11200 followed by 11000, and Put at 10700 followed by 10500 suggests a narrow trading range for the index. PCR stands at 10700 validate it as an immediate support level.
Nifty future strategy for the week
Nifty weekly support at 10500 while resistance at 11080.
Price is likely to trade in a range of 500 points from 10500 on the downside and 11080 on the upside. Any weekly close above 11080 may lead it for the next 300-500 points.
Nifty future strategy for the day
Nifty, Intraday support at 10850 and Resistance 11000.
Either side of the move will give the next 80-120 in the respective direction.
On the other hand, Financial index Bank Nifty closed down 1.93% at a weekly level. Price recovered with the H&S pattern on the intraday chart suggests a target of 22400-22900.
Technical – Index price has taken a resistance of 23000 throughout the week and support around 21000. Price is likely to trade in the aforementioned range.
Trend: Price has recovered with the “Double Bottom” bullish price pattern on a daily scale, which indicates a target of 26500 in upcoming trading sessions.
Immediate resistance lay down at 23000. Trading above 23000 will lead it for 23900-25200-26500, Else it may test 21000 marks. Trading below 21000 may correct it further for 20800-19500.
Bank Nifty future strategy for the week
Bank Nifty, weekly support at 21000 while resistance at 23000.
Either side of the breakout will give the next 1500-1800 points in the respective direction.
Bank Nifty Future strategy for the day
Nifty Bank intraday support at 21500 and Resistance at 22100.
Catch it, above 22100 for the next 300-500 points, Else it may test 21700-21500 on the downside.
Traders can trade safely with levels only. More will update during market hours.
Nifty Pharma formed a perfect setup for the bulls
The Indian pharmaceutical industry is the world’s third-largest drug producer by volume and the country’s market manufactures 60 percent of vaccines globally. With the onset of the COVID-19 outbreak, the demand for pharma products increased rapidly. The few Indian pharmaceutical companies are the top contender in the race to launch the Covid-19 vaccine. In upcoming days this sector will outperform and will touch new milestones.
Nifty Pharma has given a breakout abve the resistance on the daily chart and has given weekly close on a strong note. We will expect it to touch new highs in upcoming sessions. Momentum indicator RSI supports our positive view in this sector. Major hurdle around 10400, sustain above 10400 will take it to 10800 and then to 11000 levels in days to come. Support around 9800, break and close below 9800 will see a fresh negative move till 9300 in this sector.
Stock to perform this weak are:
Divis Labs – Stock has given a sharp break out of its consolidation zone and looks good on the charts. Traders can do buying around 2240 for the upside move till 2340 and then to 2400 levels in days to come. Support and stop loss below 2140 on a closing basis.
Lupin – Stock formed a bullish candle on the weekly chart and looks attractive for the new highs. Traders can go for buying around 890 for the upside target of 930 and then to 950 in days to come. Support and stop loss below 850 on a closing basis.
Top Stock Recommendations for 20th July 2020
VIP IND (Cash)
Vip Industries stock looks positive on the charts and formed a bullish pattern. Traders can buy it around 265-262 for upside move till 280 and then to 300 levels in days to come.
Support and stop loss below 248 on a closing basis.
ORIENT CEMENT (Cash)
The stock formed a large bullish candle on the daily chart. Traders can buy around 68-67 for the upside move till 75 and then to 78 levels in days to come.
Support and stop loss below 62.
Grab Voltas above 586 levels as the stock will give a sharp breakout above 586 levels on the weekly chart.
Traders can buy above 586 with a stop loss below 550 on a closing basis for an upside target of 630 +++ levels in days to come.
The stock has formed a flag pattern and looks positive on the weekly chart. Catch it above 445 levels.
Traders can buy ICICI Pru above 445 with a stop loss below 430 on a closing basis for an upside rally of 470 +++ levels in the coming days.
More will update on Nifty and Bank Nifty along with stock specific on daily basis on our WhatsApp and Telegram Channel.