Nifty Index Chart Analysis
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Nifty started the third week of June on a jittery note as late on Saturday, June 18, Raghuram Rajan made a surprise announcement that he would not be seeking a second term as RBI governor after his term expires in September this year. However, markets after witnessing a gap down did recover with full force as the government laid out big ticket changes in FDI on June 20. The defence sector is now completely opened up for FDI through government approval route and the government has permitted 100 per cent FDI in civil aviation, animal husbandry and trading including through e-commerce, in respect of food products manufactured or produced in India.
Technically, Nifty formed a potential ‘Bullish Counter Attack’ candlestick pattern as against formation of stalled type candlestick patterns in the last couple of weeks. This indicates that after a consolidation or sideways movement, the markets are trying to regain the momentum. Now going forward, Nifty will face resistance around levels of 8295-8340. If Nifty manages to sustain above this zone of 8295-8350, it is likely to scale up to levels of 8550-8630. On the downside, immediate support is placed around the levels of 8060 and any close below this level will trigger fresh selling and in this case Nifty is likely to correct up to levels of 7930-7970.
Here are key levels to watch out for the medium term
| Ideas | Nifty Levels | Action to be initiated | Probable Targets |
| Resistance for the medium term | 8295-8340 | Close above 8295-8340 on the weekly chart would give further momentum to the bulls. | 8540-8620 |
| Support for the medium term | 8060 | Close below 8060 on the weekly chart would trigger sell-off. | 7930-7970 |
Nifty Index Daily Chart Analysis
On the daily time frame, Nifty formed a ‘Bullish Engulfing’ Candlestick pattern as against ‘DOJI’ pattern as on June 17, 2016. At present, Nifty continues to hover around near its 61.8 per cent retracement level of down-move from high of 9119.20 to low of 6825.80. The way forward is quite challenging for the bulls as Nifty has cluster of resistance placed in the zone of 8250 to 8330. Why the zone of 8250-8330 is a hurdle for Nifty-first the level of 8245 is a key hurdle as defined by 61.8 per cent retracement level, second the level of 8330 is a previous swing high which was registered in the month of October, 2015 and in the past Nifty has seen a major dip after failing to cross this level. Hence, these areas could be a tuff task for the market in the coming weeks. In any case, if the positive sentiment helps bulls to cross this hurdle, it’s likely to enter into a new orbit and Nifty is likely to scale up to levels of 8540 and 8620. On the downside, first important support placed for Nifty is around the levels of 8060 and if this level is breached next major support is placed around levels of 7930. The daily momentum oscillator RSI is quoting above 60, which is positive for Nifty.
Here are key levels to watch out for the short term
| Ideas | Nifty Levels | Action to be initiated | Probable Targets |
| Resistance for the short term | 8330-8340 | Close above 8330-8340 on the daily chart would give further momentum to the bulls. | 8540-8620 |
| Support for the short term | 8060 | Close below 8060 on the daily chart would trigger panic sell-off. | 7930 |
[PAGE BREAK]Wipro : Buy CMP ……………561
BSE Code ……507685 TGT 600/640 SL…….. 520
The stock is currently trading at 561 levels. Its 52 week high and low stands at Rs 613/ Rs 509 which were clocked on October 01, 2015 and February 29, 2016. At the same level of 52-week low it has formed double bottom and witnessed superb recovery. From the last couple of months, the stock of Wipro has been trading in wide consolidation phase majorly around 530-550. Recently Wipro gave ‘Bullish Engulfing’ pattern breakout with huge volumes at Rs 552 level which is its 200-day EMA level. The stock also witnessed a Bollinger band breakout at the same level. Indicating some more upside, the scrip may cross the technical level of Rs 600. Moreover, the momentum oscillator RSI is quoting at 57 levels, which indicates strength. By taking into consideration all the parameters, we recommend BUY in Wipro from 560 to 561 levels with a target of 600 followed by 640 and a stop loss of 520.
CMP ……………882
BSE Code ……500830 TGT 920/950 SL…….. 848
FMCG giant Colgate-Palmolive (India) is currently trading at Rs 883. Its 52 week high/low stand at Rs 1049.75/Rs 787.60 quoted on July 30, 2015 and May 24, 2016. The stock recently witnessed almost a double bottom after hitting its previous 52-week low at 787-790 levels. Considering the weekly chart, 787-790 level also acts as a major resistance turned support since January 2013. Moreover, it has just given a multiple resistance breakout on daily charts near 870 levels which suggests further upside with justifiable volumes. The breakout also suggests a trend reversal if the stock stays above 870-873 levels on closing basis. On the lower levels the stock has a vital support at Rs 850 which is its 50-days EMA and Rs 860 which is its 100-day EMA. By calculating this, the traders can initiate a BUY in the stock from 880-875 levels with a target of 920 followed by 950 levels with a stop loss of Rs 848.