Nifty support placed at 16400, Bank Nifty needs to hold above 34000; Buy these stocks for gains

Nifty support placed at 16400, Bank Nifty needs to hold above 34000; Buy these stocks for gains

By Rohan Patil

Volatility was at its peak for last week where Nifty 50 witnessed carnage selling on February 24, witnessing its highest intraday loss due to the geopolitical crises between Russia and Ukraine. On the weekly chart, the benchmark index close below 3.50 per cent and formed a tall red candle which indicates a seller-dominated week. Due to a sharp recovery on February 25, prices were successfully able to protect their 50-week exponential moving average on the weekly chart which is placed at 16430 levels. 

Currently, support for the Nifty is placed near 16400 and 16200 levels, and breaking below these levels will open the gate for 15800 levels in the coming weeks. The upper band is capped near 17100 and once the gap gets filled then the range might extend till 17400 levels.

Bounce back in Bank Nifty?

Bank Nifty traded lower for the third straight week and has given a rising wedge pattern breakdown on the weekly chart with closing below three per cent. On February 24, the banking index closed below its 50-week exponential average but a sharp recovery on February 25 has protected its 50 EMA levels which are placed at 35660 levels. On the daily chart Bank, Nifty has witnessed a head & shoulder pattern breakdown and a pullback on 25th Feb can be considered as a retest of the neckline.

The indicators and Oscillators are indicating a bounce back, where else prices are still below their important averages on the daily time frame. Currently, support for the Bank Nifty is placed near 35000 and 34000 levels, and breaking below these levels will open the gate for 33000 levels in the coming weeks. The upper band is capped near 37300 and once the gap gets filled then the range might extend to 38600 levels.

JSW ENERGY: BUYTarget: Rs 362 | Stop Loss: Rs 317Return 08.50%

JSW STEEL has given a consolidation range breakout on the weekly chart and the prices are continually sustaining above its trend line support.

In the current volatile week, prices have dipped to 310 levels then it witnessed a strong recovery from the lower level’s on the Fridays trading session and closed above its trend line support. In addition, prices closed above their 21 & 50 – day exponential moving average. The momentum oscillator RSI (14) is reading near 60 levels on both, the weekly and daily time frame indicating positive momentum in the prices. 

COFORGE LTD: BUYTarget: Rs 4860 | Stop Loss: Rs 4275Return 08%

The prices have formed a bullish engulfing candlestick (bullish reversal) pattern on the weekly time frame after hitting lower levels on the massive sell-off day on February 24.

The prices have also given a downward sloping trend line breakout on the daily chart with above average volumes which increases the validity of the breakout. The momentum oscillator RSI (14) has rebounded from the oversold zone (30) and has formed a positive divergence on the daily time frame with bullish crossover on the cards.

(Rohan Patil is a Technical Analyst at Bonanza Portfolio. Views expressed are the author’s own. Please consult your financial advisor before investing.)