India Markets closed

'Nifty likely to head towards 10,570; Asian Paints a good short-term bet'

Sandip Das
1 / 1

India bond yields spike, rupee falls after RBI meeting minutes

Indian bond yields spiked while the rupee dropped to its lowest in more than a year on Friday after the minutes of the monetary policy panel meeting suggested that they were likely to take a more hawkish tone starting as early as June.

Jaydeb Dey

The Nifty ended Monday 0.46 percent higher at 10,528.35. Disappointing opening, amid negative global cues, followed by spectacular recovery from day’s low of around 10,397 before ending the session above the 10,500 mark indicates continuation of the uptrend.

A bullish Marubozu candle on daily chart despite negative global cues clearly articulates the intrinsic strength of the current uptrend, which is likely to continue further towards 10,570. Since this level is the 50 percent Fibonacci retracement of Nifty's entire downfall from its all-time high to its recent low around 9,950 levels may act as immediate critical resistance.

On the Nifty hourly chart, it recovered from its 50 EMA and closed on a positive note. Challenging the upside resistance placed around 10,570 is highly likely.

Nifty patterns on multiple timeframes show recovery from the day’s low followed by an ending with a bullish Marubozu candle. This is a sign of renewed strength. An intra-day dip towards 10,510 might be a decent opportunity to reposition your buy trades for the next leg of upmove towards 10,570.

On Monday, the Bank Nifty ended 0.48 percent higher at 25,320.85. The candle pattern suggests it is heading towards its upside resistance placed around 25,400 and 25,550. The latter is pivotal support.

Based on a thorough technical study, Stewart & Mackertich Wealth Management recommends Asian Paints. The stock can deliver up to 5% return in the short-term:

Asian Paints | Rating: Buy | Target: Rs 1,230 | Stop loss: Rs 1,140 | Return: 5%

The stock ended the session with a downward trendline breakout around Rs 1,170 levels. Steeply rising RSI and ADX recovering to above 20 is an indication of a strengthening uptrend. 13-30 EMA bullish crossover on the daily chart makes the bull case even stronger. We recommend Asian Paints as a buy on dips with a short-term upside target of Rs 1,230 per share.

Disclaimer: The author is Technical Analyst at Stewart & Mackertich Wealth Management. The views and ideas expressed above may have been suggested to the clients of Stewart & Mackertich Wealth Management. It is advised that investors/traders should consult with their Certified Experts before taking any investment decision.