Zee Entertainment - Ready for Blockbuster sessions

Bullish Shark Pattern in Daily chart of Zee Entertainment 

Dr Reddys Lab - Need a pill to break 2200

Bullish Butterfly Pattern

Buy at CMP : 2310 and on dips to 2240 for target of 2480-2545 with stoploss of 2200 on closing basis. 

Is Modi Wave over ??

“Hum Modiji ko lane wale hai.. Acche Din aane wale hai..”  - the most popular words in India from last three months. Everything has been saffronied by the Modi Wave.

As anticipated by market, Modi led BJP came into power with full majority. We have witnessed a sharp rally actoss the market. After the election results, we are hearing the targets of 8000, 8400 in Nifty from large foreign as well as domestic institutions. But there are couple of saying which is so common in the stock market.

1.  “Buy on rumors, Sell on news”  

2. “Sell May and go away”

Both the above sayings are contradicting to the bullish view of the institutions, which creates lot of confusion among retail traders. I respect the views and analysis of institutions, but the question is “Will market continues the upmove with same pace or we are heading towards a correction ??” These institutions never tells us about this, and when Nifty comes to 8000 (even after a healthy correction upto 6000) they will speak on air about their mentioned targets.

As per my analysis, the strident rally in Nifty and BankNifty can halt here for a while before the next rally. Here at current juncture, I’m expecting a correction of around 5-7% in Nifty and Bank Nifty. It will be a tough hurdle for Nifty to close above 7550 levels. A close above 7575 will negate the bearish move in the index and a rally towards 8000 cannot be ruled out. In contrary, in this correction, Midcap and Smallcap counters can rally and outperform the broader market.

Now you must be thinking that - on what basis I’m saying all this ??

So, here is the answer – I’m observing Bearish Harmonic Pattern in many Stocks along with Indices.

Before looking at charts, lets discuss what is harmonic pattern ? and how it works ?

Harmonic Patterns are one of the most reliable patterns, if plotted correctly. They are completely centered on Fibonacci numbers. The real beauty of this pattern is that when properly identified, it enables you to enter with the trend in a high probability reversal zone with minimal risk. There are few Fibonacci ratios which are commonly used while identifying harmonic pattern. These are 38.20, 61.80, 78.60, 88.60, 50, 113, 127, 141, 161.80, 200, 224, 261.80, 314 and 361.80. There are many types of harmonic patterns viz BAT, BUTTERFLY, GARTLEY, CRAB AND SHARK.

Below are the self-explanatory chart of Nifty, BankNifty and best shorting candidates : 

CNX NIFTY - WEEKLY CHART : 

BANK NIFTY - WEEKLY CHART :  

KOTAK BANK - WEEKLY CHART : 

ORIENTAL BANK  OF COMMERCE - WEEKLY CHART : 

ACC LTD - WEEKLY CHART : 

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