Nervousness persist, Nifty may face resistance at 10,850 levels
“The Nifty ended the session with a Hanging Man candle, which implies that nervousness still persists” says Jaydeb Dey of Stewart & Mackertich Wealth Management
Jaydeb Dey
The Nifty ended Thursday 0.45 percent lower at 10,808.05. It opened with a minor gap down and recovered from the day’s low of 10,774 before ending the session with a Hanging Man candle. The pattern on the daily chart implies that nervousness among traders still persists. Hence, the index may continue facing resistance on a rise around 10,880 levels. Its midway critical resistance is placed around 10,850. On a similar note, intraday correction is likely to continue till 10,740 levels.
On the hourly chart, the index recovered from its 50-day exponential moving average (EMA) and managed to close above the 10,800 mark. Ending the session above the 10,800 mark implies it may again retest its upside resistance placed around 10,850 levels. We still prefer being cautious on a rise as long as the Nifty remains rangebound.
Nifty patterns on multiple timeframes show it ended the session with a Hanging Man candle, which implies that nervousness still persists. Staying cautious on rise is advised.
The Bank Nifty ended Thursday 0.3 percent lower at 26,562.25. It ended the session with a Hanging Man candle. Its downside pivotal support is placed around 26,400, with upside resistance around 26,800 levels.
Based on a thorough technical study, the research firm recommends Sun Pharmaceutical Industries for the short term:
Sun Pharmaceutical Industries | Rating: Buy | Target: Rs 595, stop loss: Rs 535, Return: 7%
The stock has recovered above the 200 EMA on daily chart placed around Rs 534 levels. Also, sustained closing above previous bearish reversal point around Rs 540 levels is a strong argument.
Based on the above mentioned observations, the firm recommends Sun Pharma as a buy on dips for the short term upside target of Rs 595.
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