Nifty Index Chart Analysis

Nifty after registering a fresh 52-week high, a record closure, retreated from the higher levels amid February series F&O expiry. However, the start of the last week of February was dull as investors remained wary ahead of the UP state elections' outcome. Global markets, specifically the Asian peers also contributed to the fall ahead of Donald Trump along with FED speakers’ address to the Congress and the US economic data due on February 28, 2017.

Technically speaking, the correction depicted profit booking after five consecutive weekly upbeats in the benchmark indices. On the daily chart, the Nifty Index formed a 'Doji' like candlestick pattern as on February 22, 2017 and it was followed up with another small negative candle with long upper wick, suggesting tentativeness at higher level. However, DIIs have been the constant buyers in the markets.

It’s for the fourth time that Nifty has touched the 8960-8980 levels, but it has failed to sustain above these level on a weekly time frame. Though an interesting pattern is unfolding on the Nifty, the cup and handle pattern on the weekly chart, the formation of pattern started off during March 2015 when it hit the record high of 9119 level. Nifty gave an obvious correction from the multiple resistances at 8980-8990 levels.

The Daily RSI too was quoting at 75 levels, which depicted an over-bought zone. Currently, the Nifty is trading below its important psychological mark of 8900. Going forward, the zone of 8970-9000 is a crucial resistance area, as we have highlighted that Nifty has touched the level of 8960-8980 numerous time in the past two years or so, but has not managed to close above this level. Hence, Nifty if manages to close above the level of 8970-9000 on a weekly basis, it’s likely to scale up to levels of 9120-9240.

Whereas, on the downside the zone of 8800-8820 is a crucial support level for the Nifty. A close below level of 8800-8820, may open up for correction up to level of 8700. Going forward, important event is the outcome of election results which will be announced in the mid of March 2017. With this, Nifty may remain volatile to tentative as long as there is no clarity on the outcome of elections.

However, the heavy weight defensives from IT sector may continue to pull Nifty on the upside owing to the buyback optimism that the companies are carrying with itself. Moreover, Pharma too is expected to refrain markets from witnessing a heavy fall after speedy approval by US FDA on Indian generic drugs. However, as the long-term picture for Nifty remains strong and it hovers above 8970-9000 on a closing basis, we may see Nifty heading to fresh all time high.

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MPHASIS ... BUY ... CMP Rs. 595

BSE Code : 526299 | Target 1 ..... Rs. 621 | Target 2 ..... Rs. 650 | Stoploss....Rs. 555 (CLS)

Mphasis is currently trading at Rs.595. Its 52-week high/low stands at Rs.621.75 / Rs.414 which have been made on June 27, 2016 and February 29, 2016. Considering the weekly time frame, the stock has been trading with higher tops and higher bottoms since February 2015, but had witnessed a consolidation from June, 2016. The stock formed ‘inverse head & shoulders’ like pattern though on the top and recently reported a multiple resistance breakout at 580 level. This suggests a bullish continuation of up to 621 in the first place, followed by 650 level. The 14-period RSI is quoting at 65 which suggests some more upside potential for the stock. Going forward, the stock may witness some volatility or a correction in the form of a pullback of up to 580 level, but it will see a potential upside rally from the said levels or from current levels. With this we suggest, a BUY in the stock from CMP to Rs.580 level for a target of Rs.621 followed by Rs.650 and a stop loss of Rs.555 which is just below the 50% retracement level of the current upward rally.

DISH TV INDIA ... BUY ... CMP Rs. 96.25

BSE Code : 532839 | Target 1 ..... Rs. 102 | Target 2 ..... Rs. 109 | Stoploss....Rs.88 (CLS)

The stock of Dish TV India is currently trading at Rs.96.25. Its 52 week high and low stands at Rs.109.9/ Rs.65.25 and have been made on August 01, 2016 and February 29, 2016. Considering the weekly time frame, it’s the second consecutive positive week for the stock after it has broken out of consolidation with multiple support at 80 level. the stock has given a downward sloping trendline breakout at around 95 level with justifiable volumes. Last week, the stock broke above its 50 days and 100 days EMA levels at 91 and 88 respectively. Moreover, the 14-period RSI is quoting at 60 which means bullish for the stock. With this, the stock may continue to move northwards and hence we advise traders to initiate a long position in this stock at Rs.96.7-93.4 with a price target of Rs.102 followed by Rs.109, stop loss should be maintained at levels of Rs.88.