Profit-taking drives Sensex, Nifty down for the week as weak Asian indices weigh on sentiment
Technically, the index took good support during the formation of the lower Bollinger Band and fell further. Additionally, the Stochastic indicated a positive bias although the MACD is still showing some weakness with a negative crossover.
On an hourly chart, the index has moved above the 21 HMA and also formed as a rounded bottom, pointing to a further recovery in the near term. Right now the owl appears to have resistance at 15,915 levels while immediate support stands at 15,600.
Top winners for the week ended July 2, 2021
Dr Reddy broke a cup and a handle on the daily chart and stabilized above the 21-day moving average, indicating a strong uptrend in the near term. The convergence lines of the Ichimoku cloud have crossed the divergence line, indicating an uptrend. The other clouds of the Ichimoku indicator also show a positive trend. The ADX settled at 19 levels indicating decent volatility in the stock price action. The stochastic indicator has climbed in a one way direction, indicating strength. The stock has support at 5200 levels, while immediate resistance is at 5650 levels. Overall, the trend looks bullish and a further rise could be seen in the coming days.
Cipla closed Friday’s session negatively and slipped below the upper Bollinger Band. The ADX closed at 18, indicating an average volatile session in the share price. The Chaikin Money Flow enters a negative phase, which indicates a profit taking during the next trading sessions. The stochastic indicator has given a negative cross to the downside, indicating a possible downtrend in the short term. The stock has closest median Bollinger Band support at 962 and resistance at 990. The overall profit reservation could be seen in the next session.
Tata Motors moved above the 15-day moving average indicating near-term strength. The stock closed above the clouds as well as above the convergence line of the Ichimoku Clouds indicator, indicating further bullish movement. The ADX closed at 26 levels indicating good volatility for trading. The stochastic indicator has also given an upward cross which indicates a northward movement for the stock. The stock has closest support at 333 and resistance at 349 levels. Overall, the title is on a break for a 360 goal.
On a daily chart, the stock has formed a hammer candlestick with the support of its extended trendline, indicating a bullish movement in the meter. Additionally, the stock traded in Flag Pattern, suggesting a bullish movement. On a daily chart, the stock traded with a positive cross of 21 * 50 day moving average which can be seen as a bullish cross which shows bullish movement in the meter. On an hourly chart, the true strength indicator has given a positive cross to the upside where it indicates good strength for the stock to move upward. For the days to come, the stock has good support at 2430 while resistance comes in at 2530, a cross above the same may show bullish movement.
On a weekly chart, the stock broke past its previous resistance levels with volume activity suggesting force in the meter for the upside. Additionally, the stock broke the uptrend line and held above it may show strength in the meter. Additionally, the stock has formed a bullish marabozu candle, which adds further strength to the counter. Indicator of stochastic momentum, K percent is trading above D percent, which highlights the strength of the meter. On a daily chart, the stock traded above the moving average, suggesting a bull run in the coming days. For the coming days, the stock looks bullish and supports at 4,240 as it trades near a lifetime high.
Top losers this week
On the daily chart, after a long bullish rally, Britannia gave a healthy correction to the 50% Fibonacci retracement level. In addition, the stock supported the 200 exponential moving average and the earlier demand zone, indicating a bullish reversal of the counter in the medium term. Additionally, on an hourly chart, a Stochastic Oscillator RSI suggested a positive cross, which is again confirmation on the upside in the short term. Additionally, the action formed a Dragonfly Doji candlestick with pushing volume, indicating a bullish pattern in the meter. Support stands at 3,470 while resistance stands at 3,706 levels.
On four hourly charts, Bajaj Finserv gave a breakdown of the ascending channel with push and trade volume below the 50 exponential moving averages, indicating a bearish reversal in the near future. The stock formed bearish candlesticks from Marubozu, which is again confirmation on the downside. Additionally, an RSI Stochastic Oscillator suggested a negative crossover. Additionally, an RSI momentum indicator (14) is in an overbought zone over a weekly period and has experienced divergences which indicate a further reversal of the counter. In addition, the ADX also supports the current trend. Support is at 10,800 while resistance is at 12,520 levels.
On a weekly basis, the stock posted profits from the top, but was supported by 21WMA, suggesting that a hold above the same may show a rebound in stocks. Additionally, the stock has formed a dark cloud cover candlestick pattern which indicates near term weakness. Additionally, the stock also slipped below the 21 day SMA. A MACD and Stochastic momentum indicator suggested a negative cross on the daily calendar, which confirmed bearish movement for the sessions to come. On the downside, the stock could test support at 6,500 Marks while resistance hits 6,970 levels.
On a weekly basis, the stock slipped more than 5% from its close the week before to settle at 27,014.90 levels. Over the daily period, the stock held below the formation of the lower Bollinger Band and Ichimoku Cloud, indicating a downtrend in the meter. Additionally, the price has also moved below the 100-day SMA, which suggests a long-term downtrend. An RSI (14) and MACD momentum indicator also witnessed a negative cross on the daily chart. So, based on the structure above, we would expect more downward movement towards the 26,000 level. On the lower side there is support at around 25,700 while resistance is at 28 400 levels.
The stock was in corrective mode as we saw continued decline for over a week, but in Friday’s session the stock showed a slight rally and closed at 108.45 levels with gains of 0.84%. The stock also took immediate support for the formation of the lower Bollinger Band, suggesting a further pullback in the meter. Moreover, the stochastic indicator also showed a positive cross, confirming a short-term reversal. Therefore, we recommend a buy strategy on dips in the short term IOC.
(Sumeet Bagadia is Executive Director, Choice Broking)