In the week gone by, the bulls dominated throughout. In the penultimate week, the Nifty had formed an inside bar on the weekly chart, whereas last week it broke out on the upside, leading to a sharp upmove.
On the way up, the index has crossed its short and medium term falling trend line. It also surpassed the 78.6% retracement of the fall from 11,171 to 9,951 as well as the May high of 10,929.
As per the principle of role reversal, all these parameters that earlier acted as resistances shall now assume the role of supports. Major support for the benchmark stands at 10,800.
The daily as well as weekly Bollinger Bands are in expansion mode, thus allowing the bulls to stretch their arms. Momentum indicators on these time-frames are in favour of the bulls.
On the higher side, 11,100-11,171 is a crucial hurdle zone to watch out for. If the bulls manage to cross that region then we can look for significantly higher levels.
Here is the list of 3 stocks that one can bet on for better returns in the short term:
Asian Paints: Buy | Stoploss - Rs 1,346 | Target - Rs 1,500
The stock is forming higher top higher bottom on the daily chart, which is a bullish sign as per the Dow Theory.
In terms of the wave structure, it is forming wave extension on the upside. The daily & weekly momentum indicators are in bullish mode.
Idea Cellular: Buy | Stoploss - Rs 51.50 | Target - Rs 62
The stock has formed a correction for last few sessions after Impulse on the upside.
In terms of the Fibonacci retracements, the stock is getting support near the 78.6% retracement mark. On the hourly chart, it seems to be forming an Ending Diagonal, which would mark end of the correction from short term perspective.
Allahabad Bank Futures: Sell | Stoploss - Rs 41 | Target - Rs 35
The stock formed a short term pullback that faced resistance near the crucial daily moving averages.
Fresh selling was seen over there that has resulted into a fresh move down. The daily momentum indicator has triggered a bearish crossover.
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First Published: IST