Technical Analysis of Indian Equities by Nooresh

Nifty a 300-400 + pointer move on cards ?

Over the last few weeks the consensus view has been the markets will continue to consolidate and be a boring time for the markets. But looking at the technical chart it seems the market can spring a surprise.

Triangle Nifty

  • Nifty has been in a very tight range of 10550-10900 for the last 2-3 months with most of the closing around 10700 mark.
  • A breakdown from a steep sloping trend line did not see much follow up on downside and we are back in the range.
  • In technical terms it may be called a symmetrical triangle with breakout points now at 10600 and 10900.
  • A breakout may lead to a 300-400 pointer quick move.

On a side note we are seeing a lot of participants focusing on writing options and with low volatility as well as low IVs its setting up for a surprise move. If one is gutsy this may be a time to buy option straddles for next couple of months. ( remember options requires a lot of risk management. Also be careful writing options for a couple of months)

Some of the technical charts in the Nifty 50 point out to similar structures and can give a surprise.

Tata Motors

  • The downward channel continues.
  • 250 and 290 the breakout points.
  • Will it crack further or manage a big reversal. Not a strong price action on break of major lows.

Tata Motors

ICICI Bank

  • The range now getting compressed after crazy moves post re-capitalization news.
  • 260 or 290 will be points to watchout for.
  • A decent weight in the index

ICICI Bank

YES Bank

  • Short term breakout above 340-345 done. Can it cross 365 and make a 1 year range breakout.
  • On the downside a break below 325-330 would mean a breakdown.

Yes Bank triangle

Reliance Inds

  • In contrast Reliance seems to be expanding the range.
  • Right now almost in the middle of the range.
  • Will it go towards 900 or 1050-1080 ?

Reliance Expanding

Maruti

  • This one has broken out from the range above 9000.
  • Can it go back to 10k or higher ?

Maruti

Mahindra & Mahindra

  • Will the momentum continue or flop ?

M&M

ITC Limited

  • 255-260 and 285-290 has been the major range areas for the stock for almost 6-12 months.
  • A good candle yesterday but can it follow up?
  • Will it break on the downside or upside ? In either case can be a big move.

Range ITC

HDFC Limited

  • HDFC Limited and HDFC Bank both making up almost 18% of the index can give the biggest impact.
  • HDFC is on verge of a breakout above 1940.

Triangle HDFC Limited

HDFC BANK

  • The largest weight in the Nifty with 10% +.
  • The momentum has continued strong over the last couple of months or more.
  • 2050 and 2150 are the breakout points.

Triangle HDFC Bank

 

The last of it the indices which matter a lot – Smallcap and Midcap Indices

Nifty Small 100 – Back to an equivalent of Nifty 9700 lows.

  • NIFTY SMALL 100 -- its back to the bottoms made in May/Sept 2017
    and equivalent of 9700 Nifty.
  • A falling wedge/triangle  formation.
  • 7300-7500 cross on upside and 6900 on downside may give clarity on further momentum.

Nifty Small 100 triangle

BSE Smallcap Index

  • BSE SMALL CAP --- The 9700 Nifty equivalent bottom is a little away
    at 14700.
  • A falling wedge/triangle formation.
  • A move beyond 15700 or 16500 will give
    more clarity to the momentum.

Disclosure – Please do your own research. We may already have recommendations on some of the stock above or may open up a fresh trade so our views can be biased.

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Article by Nooresh Merani

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{ 5 comments… add one }
  • foo July 6, 2018, 15:34

    Do you see a Head and Shoulder pattern in ICICI bank?

    Reply
    • Nooresh July 9, 2018, 17:17

      ICICI Bank 265-270 seems the support if breaks one may call it a confirmation of breakdown on HNS or any other pattern.

      Reply
  • Sumod July 7, 2018, 13:30

    Nooresh, I like your Techno funda style of investing and always respected your views on Nifty. However, I beg to differ here. As you might agree, currently we are in the middle of a bear market wrt mid and small caps. Considering this, I believe Nifty should meet up with its 500EMA (by either pricewise or timewise) and/or should touch upon the oversold territory wrt RSI (14 day) before it resumes the broader bull market. Until then I don’t see a break-out happening! You can correct me if I am wrong.

    Reply
    • Nooresh July 9, 2018, 17:17

      The market does not follow any single way of moving or its not necessary for a touch to oversold territory. So lets see how it goes but if momentum continues it can surprise on the upside.

      Reply
  • Sarabjeet July 12, 2018, 19:34

    Hi Nooresh, Do you see divergence between Nifty and Bank Nifty a risk going forward ?
    In recent months Bank Nifty has gone in a different (steep upward) trajectory compared to Nifty.

    Reply

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