Nifty trend bullish for medium-term, support at 16150-16050; buy these stocks for gains

Nifty trend bullish for medium-term, support at 16150-16050; buy these stocks for gains

16150-16050 /54000-53500 would be the strong support zone for indices. (Image: REUTERS)

By Shrikant Chouhan

In the last week, the benchmark index Nifty/ Sensex first time hit the 16000/ 53500 mark and also registered fresh all-time highs of 16349.45 and 54633.58, respectively. Technically, on weekly charts, the Nifty/ Sensex has formed a strong breakout formation, which indicates a further uptrend from current levels. Post breakout the Nifty is consolidating and the intraday charts suggest narrow rage activity likely to continue in the near future. We are of the view that the medium-term trend is bullish and buying on dips and sell on rallies would be the ideal strategy for the positional traders. 16150-16050 /54000-53500 would be the strong support zone. Trading above the same uptrend wave is likely to continue till 16400-16550/ 54700-55000. Below 16050/ 53500 breakout traders may prefer to exit from trading long positions.

SBIN: BUY, CMP 426.35, TARGET 450, SL 4153

After a strong uptrend rally, the stock witnessed a short term correction from its all-time high of 467, however, the downward move seems to be over as the counter is trading near its multiple support zone hence we expect revival in trend from the current levels.

WIPRO: BUY, CMP 604, TARGET 635, SL 590

The stock has shown an incredible up move in the past and it is still rising gradually on the higher side. The higher top and higher bottom chart series hints at a bullish continuation pattern to continue in coming sessions, the rise in volume activity in the last few days indicates bullishness in the counter.

TATASTEEL: BUY, CMP 1372.15, TARGET 1440, SL 1340

The stock had been in a phenomenal uptrend forming the bullish continuation chart patterns constantly, presently due to some profit booking a temporary pause in the momentum is seen however a strong reversal is very likely from the support of the retracement zone for further upside.

HINDUNILVR: BUY, CMP 2388, TARGET 2500, SL 2340

On the daily chart, the stock has reversed sharply from its double bottom support zone with a strong bullish candlestick formation, and currently, it is consolidating in a range with decent volume activity, moreover, the formation of hammer candlestick pattern near short term averages suggests range breakout for the further uptrend in the coming horizon.

(Shrikant Chouhan is the Executive Vice President, Equity Technical Research at Kotak Securities. Views expressed are the author’s own. Please consult your financial advisor before investing.)

Bitcoin Price Analysis: Is a Short-Term Correction Incoming as BTC Forming Bearish Divergence?

BTC’s multiple daily closes above the 200-day MA have been bullish, but for the past 3 days, the 4-hour chart has been showing bearish divergence.

This puts BTC in a tight spot in terms of technicals and timing. Last week, BTC managed to make an intraweek high above the 21-week moving average and 200-day moving average but found selling pressure heading into the weekly close.

BTC had a shorter-than-expected pullback to $42.8k and staged another attempt to push above the 21-week moving average and the 200-day moving average this week.

BTC must make a strong weekly close above these levels to confirm the first major step in re-entering bull market continuation.

Risk of a Short-Term Correction Increasing for Bitcoin’s Price

Given the bearish divergence on the 4-hour chart, the risk of a near-term consolidation or pullback has been increasing. This started appearing earlier in the week as BTC pushed higher, while the relative strength index made lower highs. BTC is currently backtesting the 200-day moving average for the second time this week.

Ideally, for the bulls, BTC needs to consolidate in a tight range around the 200-day moving average to avoid the risk of falling back below this critical level. Doing so will help cool off the technicals and prepare for the next push higher. BTC bulls would like to see the consolidation finish near the tail end of the week with a strong rally to mark the first weekly close above the 21-week and the 200-day moving average.

A weekly close above these major levels will flash a very bullish buy signal of a technical breakout, likely encouraging a new wave of capital to enter BTC, driving price higher.

Outlook Bullish in the Long-Term

Overall, from a technical view, BTC’s mid to long-term trend has been significantly improving with momentum continuing to strengthen. BTC bulls are now waiting for a major buy signal to flash on the weekly chart.

On-chain data is looking very bullish at the moment, indicating this pullback is likely technical-driven selling, rather than long-term holders planning exit liquidity as previous bear markets have shown.

The recent 3-day consolidation and pullback have declining volume, which signals weak selling pressure. CryptoQuant data clearly shows there have been more total net outflows on spot exchanges during this period. On-chain data on spot exchange reserves and spot exchange net flows shows the recent rally has been driven by spot buying – something essential in a recovery phase of the market. Notably, spot exchange reserves have fallen to multi-year lows, a strong signal that BTC is being accumulated and being withdrawn from exchanges by large buyers.

Neutral to negative funding rates on derivative platforms and rising futures open interest implies the bears are skeptical of this rally and continue to pile on shorts. When funding rates remain neutral to negative for extended periods of time with rising open interest, it indicates the market is net short, which increases the probability of a short squeeze that can send prices significantly higher.

BTC has rallied more than 62% from the lows, and BTC funding rates remain neutral to negative. This strongly suggests there is room for further upside given the market remains net short. Spot buying will be one of many catalysts to squeeze the shorts and help BTC confirm the breakout into bull market continuation.

Another important part of the market to watch is BTC miners. They have been net accumulating BTC during this entire consolidation and early breakout phase. Additionally, the BTC hash ribbons indicator flashed a long-term buy signal, historically leading to very large rallies.

With cautious near-term technicals and BTC in a tight spot relative to the 200-day moving average, the aggregate data currently available paints a bullish outlook for the largest cryptocurrency. BTC bulls will be waiting for this week’s close for potential confirmation of the bull market continuation.

Ahead of Market: 12 things that will decide stock action on Friday

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NEW DELHI: Nifty50 rose for the fourth straight day and formed a bullish candle on the daily chart on Thursday. Analysts said after breaking above the 16,350 level, Nifty50 may see more upside in the coming days.Gaurav Ratnaparkhi of Sharekhan said Nifty ’s medium-term target is placed at 16,800. “The hourly upper Bollinger Band has started moving higher after a contraction phase, which is making room for price action on the upside,” he said.Shrikant Chouhan of Kotak Securities said the breakout formation suggests a continuation of the uptrend in the near future. “The 16,280-16,220 range would be a key support level for trend-following traders. Above the same, the range breakout formation is likely to continue up to 16,400-16,475 levels,” he said.That said, here’s a look at what some of the key indicators are suggesting for Friday’s action:US stock indices were trading lower in the early session. The Dow Jones and S&P 500 had closed at record highs on Tuesday. After an hour of trading on Thursday, the Dow Jones Industrial Average fell 90.81 points, or 0.26 per cent, to 35,394.16, the S&P 500 lost 3.74 points, or 0.08 per cent, to 4,443.96 and the Nasdaq Composite dropped 8.13 points, or 0.06 per cent, to 14,757.01.European shares rose on Thursday, hitting yet another record high, as strong earnings from insurers and M&A activity in the UK helped offset a fall in mining stocks. The pan-European STOXX 600 index inched up 0.1 per cent, extending gains to a ninth consecutive session.Nifty50 on Thursday climbed for the fourth straight session and in the process broke above the 16,350 level. Analysts see more upside for the index in the coming days, but a pause cannot be ruled out in the 16,400-16,475 range. India VIX fell 3.89 per cent from 12.71 to 12.21 level. The overall lower volatility indicates that the bulls are in command and declines are getting bought into. Options data suggested a broader trading range between 16,100 and 16,500 levels, and an immediate trading range between 16,200 and 16,500.Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade setup on the counters of Bank of Baroda,, Indoco Remedies, IDBI Bank,& Industries,, Dhani Services, KEI Industries, Bhagyanagar India, Nelco, VRL Logistics, ICICI Pru Life, UTI AMC, Sundaram Fasteners, GOCL Corporation, Hester Biosciences, Ester India, Neogen Chemicals, Cosmo Films, TPL Plastech, Texmaco Infrastructure, WABCO India, TTK Prestige, Global Education and Lakshmi Finance.The MACD is known for signalling trend reversals in traded securities or indices. When the MACD crosses above the signal line, it gives a bullish signal, indicating that the price of the security may see an upward movement and vice versa.The MACD showed bearish signs on the counters of ITC, Aarti Industries, Sundaram Finance, Narayana Hrudayalaya, Eveready Industries, Rajesh Exports, Aarti Surfactants, D P Wires, JK Cement, Privi Speciality Chem, Solar Industries, IndiaMART InterMESH, PDS Multi Fashions, Esab India and. A bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.IRCTC (Rs 1613.45 crore), Tata Steel (Rs 1566.29 crore),(Rs 1295.36 crore), Tech Mahindra (Rs 1179.21 crore), Tata Motors (Rs 1017.76 crore), Lupin (Rs 965.42 crore), Infosys (Rs 955.14 crore), Power Grid (Rs 800.49 crore), RIL (Rs 794.33 crore) and SBI (Rs 719.66 crore) were among the most active stocks on Dalal Street in value terms. Higher activity on a counter in value terms can help identify the counters with the highest trading turnovers in the day.JP Power (Shares traded: 14.13 crore), Vodafone Idea (Shares traded: 12.11 crore), YES Bank (Shares traded: 7.59 crore), Zomato (Shares traded: 5.13 crore), GTL Infra (Shares traded: 4.80 crore), SAIL (Shares traded: 4.45 crore), Power Grid (Shares traded: 4.36 crore), Tata Motors (Shares traded: 3.37 crore), PNB (Shares traded: 3.27 crore) and IDFC First Bank (Shares traded: 3.19 crore) were among the most traded stocks in the session.Stocks showing buying interest: VIP Industries, Laxmi Organic Industries, Max Healthcare, Hikal and UTI AMC witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.Suvidhaa Infoserve, Future Market Networks, Shrenik and YES Bank witnessed strong selling pressure and hit their 52-week lows, signalling bearish sentiment on these counters.Overall, the market breadth remained in favour of the bears. As many as 384 stocks on the BSE500 index settled the day in the green, while 111 settled the day in the red.Many analysts seemed to have turned cautious in the broader market space and are suggesting investors book profits in midcaps and shift focus to largecaps. Should you book profits and move to largecap stocks? Can Nifty continue to hit fresh highs? What are the technical charts suggesting?