Nifty Index Chart Analysis

The week ending August 26, 2016 witnessed moderate correction of over one per cent on a week-on-week basis. Nifty index closed at 8572.55. Profit taking at higher levels clubbed with lack of positive cues kept the market in negative domain. US Fed Reserve Chair Janet Yellen amid her discourse said the case for increasing rates had strengthened yet did not indicate when the Fed would act and kept the doors open for a hike as early as first half of September. On the domestic front the new and 24^th RBI governor Urjit Patel will take charge in the first week of September.

The Nifty Index after moving sideways for the past three-four weeks ended on a negative note. Below its important psychological mark of 8600. On the weekly time frame the sequence of higher tops and higher bottoms is intact as per the larger degree. At present, the correction which we have witnessed could possibly be termed as a healthy correction and it could be processed further by forming of higher bottom. Now going forward, Nifty has crucial support placed around 8470 levels. As long as Nifty holds level of 8470 on weekly basis it would be termed as a healthy correction. However, breach of 8470 levels will attract sellers in the market and Nifty in that case is likely to correct up to the levels of 8380 and 8240. The level of 8240 is a major support which is also 61.8 per cent retracement level of the entire down move from the all-time high levels. On the upside, the zone of 8690-8735 would act as a resistance zone. If Nifty sustains above this zone, it's likely to scale up to levels of 8830-8900. The weekly RSI has been turning down from the high of 69 levels. At present, the RSI is quoting around 64 levels; the weekly RSI is expected to bounce back after testing 60-58 levels

Nifty Index Daily Chart Analysis

Nifty after registering a swing high of 8728.35 level, entered into a distribution phase due to lack of any major cue. Since then, it has moved in a tight band with bears having an upper hand as it has been drifting lower. However, it formed a reversal candlestick pattern Doji as on August 23 and 24, 2016. But, a Doji Candlestick pattern needs a confirmation, its confirmation is the next candlestick-if the next candlestick follows the direction that the market had before the Doji formation, it means no reversal may happen and the Doji pattern should be ignored. Now going forward, immediate support for the Nifty is placed around the levels of 8520-8540. A move below this level will open up for correction up to levels of 8470. A close below level of 8470 will open up for correction up to levels of 8380. On the upside, the resistance zone is placed around the levels of 8690-8740. A close above this zone will open up for up-side up to levels of 8830 and 8900. The daily RSI is quoting around the levels of 49 and the zone of 45-48 is a reversal zone on the RSI.
[PAGE BREAK]

BSE Code: 532343 Buy CMP @ Rs.326

TGT1 : Rs.353 TGT2 : Rs.363 SL@Rs.300(CLS)

The stock is currently trading at Rs 318. Its 52-week high/low stands at Rs 340/202 has been clocked on April 20, 2016 and September 1, 2015. From the last few trading sessions, the stock consolidates in the wide range at Rs 291-Rs 310. In the recent sessions, the stock has seen a technical break out after breaking the mark of Rs 310. From last nine consecutive months, the stock has been sustaining above its 200 day EMA level, which is Rs 291. The stock also managed to cross its 100 day EMA which is Rs 299, which confirms the bullish trend in the stock. Since then the stock is forming 'higher bottom higher tops' pattern in 1-year daily chart and it may continue with the series of upward momentum. By calculating the all, we suggest buying in the stock of TVS Motors at current levels for a near term target of 353-363 with a stop loss of 300.

BSE Code: 524804 Buy CMP Rs.@ 798

TGT 1 :Rs 856 TGT 2: Rs 876 SL @ 736(CLS)

The stock of Aurobindo Pharma is currently trading at Rs 792. Its 52 week high/low stands at Rs 891/ Rs 582 and has been clocked on December 30, 2016 and February 25, 2016. On the 1-year daily time frame, the stock rebounds as its formed a 'double bottom' pattern around Rs 730 mark. However from the last couple of months, the stock has witnessed some profit booking on the higher side which has been around the mark of Rs 802-810. Recently the stock witnessed superb up-move along with the rise in the volume indicating that the stock may sustain above the technical level of Rs 800. Moreover, the momentum oscillator RSI is quoting at 58-60 levels, which indicates strength. By calculating all these points, the stock may see bullish move from current level to touch its major hurdles at Rs.856-876 levels. Traders can initiate long position with stop loss of Rs 736 on a closing basis.