Markets remained in a 300-point range during the shortened Diwali week, with both the support and resistance ranges playing out well.
Historically, the market does not correct over Diwali week, and this is exactly what we’ve seen in the last three sessions, though it was a little hesitant.
Because of a few technical developments, we continue to be cautious. On October 29, the ‘Lower Top Lower Bottom’ pattern on the daily chart was verified once it broke below $18,000. The violation of the major short-term moving average of the 20-day exponential moving average (EMA), which is now operating as a solid wall, corresponded with this.
More importantly, if we look at the monthly chart, we can notice a ‘Shooting Star’ pattern, which is not good news for the bulls.
Traders should avoid placing aggressive long bets as long as the Nifty stays below 18,000–18,100 on a closing basis.
This corrective move might stretch to 17,450 first, and if things worsen, 17,200–17,000 is not out of the question. The coming week will be significant for the market, as it will likely determine the market’s near-term trajectory.
For the coming week, here are two purchase calls and one sell call:
Buy | LTP: Rs 262.50 | Stop Loss: Rs 225 | Target: Rs 278 | Return: 6% Garden Reach Shipbuilders: Buy | LTP: Rs 262.50 | Stop Loss: Rs 225 | Target: Rs 278 | Return: 6%
From August 2020 to August 2021, this stock did not change. It has finally begun to loosen up, as seen by a series of volume-based purchases since early October. It took a brief stop recently after witnessing a strong rally.
On November 3, the stock received a strong boost, resuming its previous upward trajectory. When seen in a larger context, we can see prices breaking out of a two-year consolidation zone, which resembles a ‘Triangle’ Pattern.
This is most likely only the beginning; we anticipate many more rising legs. On a modest decrease, we advocate buying for a short-term aim of Rs 278. A stop loss of Rs 225 can be used.
Sell | LTP: Rs 7,525.10 | Stop Loss: Rs 7,620 | Target: Rs 7,240 | Return: (-3.8) percent Bajaj Finance: Sell | LTP: Rs 7,525.10 | Stop Loss: Rs 7,620 | Target: Rs 7,240
Over the last decade or so, Bajaj Fin-Twins have been among the top performers. Their longer-term trend is unquestionably optimistic, but there are some signs of tiredness in the short term.
Bajaj Finance has witnessed some profit-booking in recent weeks, and while it did not perform much in the shortened week that just ended, the weekly chart appears to be poor.
Furthermore, the ‘RSI-Smoothened’ oscillator has confirmed a negative crossover, implying potential corrective moves in the days ahead. A stringent stop loss of Rs 7,620 might be used to sell. The immediate aim is seen in the Rs 7,280–7,240 bracket.
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