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By Kapil ShahTechnical Analyst-Emkay Global Financial ServicesNifty is currently facing resistance at 11,185 levels and this is likely to be broken on the upside in the current week, according to technical analysts.
Stocks such as Hindustan Unilever, Kotak Bank, HDFC Asset Management, Info Edge, Adani Port, L-T, Dr Reddy’s, Dabur and Berger Paints have bullish chart structure and poised for further upmove.
Where are we: As index had formed lower high and lower low on weekly time frame and breached rising channel, it indicates we are in grip of bears for short term perspective.
In later part of previous week, Index had staged smart recovery but it can be considered as relief rally.
Index had cut in its size by 10 per cent from its peak.
With this fall, Index had come below 200-DMA.
70 per cent of Nifty 50 stocks are below 200-DMA but remaining 30 per cent stocks which are above longterm moving average are the ones which carry higher weights.
What is in store: With immediate rise Index had reached upto 11,150 level, it is an important level because in the past, it had an important turning point at 61.8 per cent retracement level of immediate fall and 200-DMA.Collectively, it forms stiff resistance at 11,150 level.
So in the short term, the index can remain under pressure as far as it continues below 11,150 level.
Move above 11,150 can lead to further improvement upto 11,350 level.
On down side strong resistance remain at 10,600.
What could traders do: Looking at pattern of the fall in recent few years, Nifty had fallen in the range of 10-15 per cent and it had given good entry point for investors.
So with decent correction, investors can start accumulation with leading large- and mid-cap companies.
For investment perspective Adani Port, L-T, Dr Reddy’s, Titan, UPL are good stocks.
