Nifty a 300-400 + pointer move on cards ?

Over the last few weeks the consensus view has been the markets will continue to consolidate and be a boring time for the markets. But looking at the technical chart it seems the market can spring a surprise.

• Nifty has been in a very tight range of 10550-10900 for the last 2-3 months with most of the closing around 10700 mark.
• A breakdown from a steep sloping trend line did not see much follow up on downside and we are back in the range.
• In technical terms it may be called a symmetrical triangle with breakout points now at 10600 and 10900.
• A breakout may lead to a 300-400 pointer quick move.

On a side note we are seeing a lot of participants focusing on writing options and with low volatility as well as low IVs its setting up for a surprise move. If one is gutsy this may be a time to buy option straddles for next couple of months. ( remember options requires a lot of risk management. Also be careful writing options for a couple of months)

Some of the technical charts in the Nifty 50 point out to similar structures and can give a surprise.

Tata Motors

• The downward channel continues.
• 250 and 290 the breakout points.
• Will it crack further or manage a big reversal. Not a strong price action on break of major lows.

ICICI Bank

• The range now getting compressed after crazy moves post re-capitalization news.
• 260 or 290 will be points to watchout for.
• A decent weight in the index

YES Bank

• Short term breakout above 340-345 done. Can it cross 365 and make a 1 year range breakout.
• On the downside a break below 325-330 would mean a breakdown.

Reliance Inds

• In contrast Reliance seems to be expanding the range.
• Right now almost in the middle of the range.
• Will it go towards 900 or 1050-1080 ?

Maruti

• This one has broken out from the range above 9000.
• Can it go back to 10k or higher ?

Mahindra & Mahindra

• Will the momentum continue or flop ?

ITC Limited

• 255-260 and 285-290 has been the major range areas for the stock for almost 6-12 months.
• A good candle yesterday but can it follow up?
• Will it break on the downside or upside ? In either case can be a big move.

HDFC Limited

• HDFC Limited and HDFC Bank both making up almost 18% of the index can give the biggest impact.
• HDFC is on verge of a breakout above 1940.

HDFC BANK

• The largest weight in the Nifty with 10% +.
• The momentum has continued strong over the last couple of months or more.
• 2050 and 2150 are the breakout points.

 

The last of it the indices which matter a lot – Smallcap and Midcap Indices

Nifty Small 100 – Back to an equivalent of Nifty 9700 lows.

• NIFTY SMALL 100 -- its back to the bottoms made in May/Sept 2017
  and equivalent of 9700 Nifty.
• A falling wedge/triangle  formation.
• 7300-7500 cross on upside and 6900 on downside may give clarity on further momentum.

BSE Smallcap Index

• BSE SMALL CAP --- The 9700 Nifty equivalent bottom is a little away
  at 14700.
• A falling wedge/triangle formation.
• A move beyond 15700 or 16500 will give
  more clarity to the momentum.

Disclosure – Please do your own research. We may already have recommendations on some of the stock above or may open up a fresh trade so our views can be biased.

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