Bull horns and Bear ears: Dalmia Bharat, Coforge and Bajaj Finance in focus
Over the last 10 trading sessions, Nifty has experienced a slight reduction in size by just over 3%. This resulted in the Index testing the support level of 19300, followed by a positive move. To be considered in a bullish zone, the Index will need to sustain above 19300 level. Resistance levels are placed at 19650 level on the higher side. Further trend up to 19850 level will be dictated by moving above 19650 level. Conversely, moving below 19300 level will be a bearish continuation sign, and the best support level will be around 18800 level. Currently, the Index appears to be in the range of 19300 to 19600 level.
Sectors like pharma, IT, midcap, and smallcap have shown strength, while Oil and Gas, Auto, and FMCG have shown weakness.
Nifty Daily Chart
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Bull Horn Stocks
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After analyzing the recent performance of the stock, it appears to have reached the lower arm of a rising channel following a decline. This is interesting because it coincides with a horizontal support line and moving average that has acted as support in the past. A bullish candle formation at the support level suggests that buyers are present at this level.
Based on this information, the stock looks promising with potential for upside to the 2150 level. It’s important to note that the bullish view will be negated if the stock falls below the 1920 level.
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Based on my analysis of the IT industry, it appears that mid and small cap stocks are performing better than large cap stocks. It has been noticed that Coforge has recently broken out of a 70 week consolidation period and is currently receiving support from the short-term moving average. This suggests that the bulls are showing strength. Based on Technical formation, Coforge looks like a promising stock right now at 4885, with a suggested stop loss of 4685. We believe that this stock has the potential to rise up to 5200.
Bear’s Ear stocks
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In comparison to the broader index, financial stocks seem to be lacking strength. Bajaj Finance is currently at the upper band of almost a 100-week consolidation patch. However, it is important to note that the stock has formed an M-shaped pattern on the line chart, which is generally considered to be a bearish reversal sign. This bearish reversal sign holds more significance when the stock is at resistance. Furthermore, the daily chart shows that the stock is currently in a lower high and lower low sequence. All in all, it seems that the stock may continue to look weak up to the middle point of the range, which is placed at 66,00 level. However, it is worth noting that a bearish view will only be negated if the stock manages to rise above 74,00 level.
The author, Kapil Shah is Technical Analyst at Emkay Global Financial Services and technical analysis trainer at Finlearn Academy.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
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Updated: 06 Aug 2023, 08:19 AM IST
