INSUBCONTINENT EXCLUSIVE:
BY JAY THAKKARAVP- TECHNICAL AND DERIVATIVES RESEARCH, ANAND RATHI SHARE AND STOCK BROKERSWhere Are We? The Nifty is all set to close in the
positive territory for the month of December and with that it is likely to post a positive monthly close for the fourth consecutive month
With this positive close there is a high probability that the monthly momentum indicators will provide a bullish crossover almost after six
months and this may bring the good sustainable move for months to come
Nifty is right now near a breakout/resistance level of 12400 levels.
What Is In Store? Nifty on the monthly charts has formed a rising wedge
kind of pattern which indicates that the index has a resistance in the near term at 12400 levels
This also indicates that the Index will once attempt to touch the upper end of the range
Hence, 12400 is the near term target for the Index
The index has been forming higher tops and higher bottoms on the daily charts and the immediate support is pegged at 12100 levels
So, the range for the first weekly expiry of 2020 is 12100-12400 levels.
As per Elliott wave theory, Nifty is trading in its fifth wave up
which has a short term target of 12400
There will be further extension of the fifth wave only if Nifty manages to close above 12400 levels else post that there can be multimonth
correction to consolidation in markets
Above 12400, there will be a big breakout in the index which can take it above 13000 levels as well however failing to move beyond 12400
will lead to a correction.
The momentum indicator MACD is well in the buy mode on the daily and weekly charts and in this month it is likely
to provide a buy crossover on the monthly charts as well which can be a game-changer for the bulls
It may lead to a major breakout
It is the monthly MACD that is indicating that there will be a breakout above 12400 levels; however, one has to wait for the price to
confirm the same.
What Could Investors Do? Based on the above observations, the traders and investors should closely watch whether the Nifty
is able to take off 12400 levels or not as above those levels there will a huge rally i.e
multi-month rally but on the flip side if Nifty is unable to surpass 12400 levels then there can be a decent correction in markets, hence
the traders or investors should trail their stop losses to 12100 for any long positions on Nifty
Jubilant FoodWorks and PVR are looking good on charts for the short term for an upside of 4-5% in the near term
Kansai Nerolac and VIP Inds are looking good for the Investment in 2020 for the target of 50%-60% in 2020.
