INSUBCONTINENT EXCLUSIVE:
BY NAGARAJ SHETTITECHNICAL RESEARCH ANALYST, HDFC SECURITIESThe underlying trend of Nifty continues to be range-bound and the key overhead
resistance of 12350-12400 is unlikely to be broken before the index shows any meaningful downward correction, said technical analysts
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Where Are We: A small negative candle was
formed on Friday with a gap-down opening
This is placed just after the long bull candle of Thursday
This pattern indicates a range-bound movement in Nifty below the key overhead resistance of 11350
We observe a triangle pattern at highs, which has been developing for 5-6 sessions
A breakout/ breakdown of such patterns could determine a near-term direction (up 12280 and down 12190)
What Is In Store: The Nifty is now placed near the key overhead resistance of long-term trend line of around 12350-12400 levels
Hence, this area is going to be a key hurdle for the market on the way up
The present range movement could be similar to the previous two top reversal patterns (mid of April 2019 and early June 2019)
There is a possibility of another 1 or 2 weeks of range movement or false upside breakout attempt, before showing downside correction
What Could Investors Do: The underlying trend of Nifty continues to be range-bound at the highs
Though, Nifty is placed near the key resistance, there is no indication of a reversal pattern at highs
But, the daily/ weekly chart patterns signal a limited upside
The key overhead resistance of 12350-400 is unlikely to be broken on the up, before it shows a meaningful downward correction
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