Its Time to Buy

Its Time to Buy

Nifty : Nifty made Head and Shoulder Pattern in daily chart whose target has been achieved. We saw straight fall of 450 points in last 10 trading sessions. Now Nifty has good Support between 5650-5670 level. 161.80% extension level of 6229-5937 from 6133 is placed at 5663. 76.40% retracement of previous rally is place at 5655. And nifty also has a falling trendline support at 5661.  

One thing is interesting to see is whenever Nifty closes below lower band of Bollinger Band, we saw a bounce back in the index. Yesterday Nifty closed below lower band and we are expecting history to repeat itself. 

Today we saw Breakaway Gap in intraday chart. Nifty also made Island Reversal Pattern in daily chart (whose confirmation will come on close above 5735).

RSI also touch its support zone of 25-30. Yesterday RSI moved below 30, which is very close to similar oversold levels of 5500 and previous bottoms of 4500/4800. 

We can see Nifty making bottom at 5630-5660 level. And we are expecting Nifty to go to 5950/6100 level in upcoming weeks. 

Daily Chart of Nifty

60 Minutes Chart of Nifty

We prefer Maruti, Yes Bank, HDFC Ltd & SBI to buy for today. Following are the stock charts which is good buy at current levels.

Maruti : Stock cracked all the way from 1774 and reached to 1430 level within 4 weeks. Yesterday we saw Gap down below 200 days SMA it also broke 61.80% retracement level of previous rally, but we saw good recovery in the end, resulting into Hammer Candle in daily chart. Today we saw Gap up opening in the stock. Due to gap down opening on Thursday and gap up opening on Friday, it made Island Reversal & Morning Star Pattern in daily chart.

RSI of Daily chart also kissed oversold zone and bounced back.

Looking at the chart pattern and indicator, We can see 1590/1630 level in the stock. Thus one can take long position in the stock for the target of 1590/1630 with the stoploss of 1455.

Daily Chart of Maruti

Yes Bank : Yes Bank took support near 200 Days SMA and moved up. It can test 200 Days SMA in next 4-5 trading sessions. But after touching 200 Days SMA, it should move to 520/550 levels. Yes Bank is good delivery buy at CMP of 470 and on dips to 450 for the target of 520/550 with the stoploss of 440 on closing basis.

Daily Chart of Yes Bank

HDFC Ltd : HDFC Ltd is taking support of 200 Days SMA. Yesterday, we saw sharp recovery in the stock after it broke 200 Days SMA. Today we saw Breakaway Gap up opening in the stock. We also see Falling Wedge Pattern breakout in daily chart. Thus it is a buy at current level and on dips to 800 for the target of 890/920 with the stoploss of 790 on closing basis.

Daily Chart of HDFC Ltd 

SBI: SBI is took support of previous low at 1970 level and bounced back. RSI of daily chart touched the support zone of 26-31 and gave positive crossover. Today RSI also moved above the near high of 34.48. MACD of daily chart also gave positive crossover. Looking at price pattern and indicators, we can see SBI to make double bottom. But its too early to say double bottom at current levels.

I would recommend to buy SBIN 2050 Call which is trading at 59/60 and sell 2200 Call which is trading at 15/16. Maximum loss of this Bull Call spread is Rs 44 (Rs 5500 per lot) and maximum profit can be Rs 106 (Rs 13250 per lot).   

Daily Chart of SBI