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Praj Industries: Add some fuel – BUY On the weekly chart, the stock gave a breakout from bullish head & shoulder pattern at the start of the June. Despite volatility in the broader markets, the stock managed to trade above the neckline for the entire month corroborating positive view in the counter. Also, the relative strength in comparison with broader index CNX 500 has been encouraging and is expected to improve hereon as the ratio continues to make higher tops and higher bottoms. |
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Bank Nifty to lead…headed to 20k The Nifty have reversed from the intermediate declining trend and the lower top lower bottom pattern, which it has been stuck in since hitting calendar peak. First signs of the bullish trend remaining intact were visible when Nifty found strong support after retracing exactly 38.2% of the current up move, which began in February 2014. In addition, for the first time, Nifty pierced through its immediate previous peak of 8,490 on a closing basis indicating major reversal point. As the indices gear up for a sharp upmove in the coming months, we expect Bank Nifty to out-perform and lead the next rally. Bank Nifty has surged higher and broken above the top of the handle and the neckline of the cup formation breaching the pivot point 18,500. If the breakout sustains, we expect a potential target of 20,000 in the medium term. However, the break-out would stand void if 17,700 levels are breached on the downside. Nifty has broken out from an inverted head and shoulder pattern on the daily charts. If the inverted H&S unfolds the way it should, we expect Nifty rallying another 500 points up to 9,000 levels in medium term. Having said that, the breakout would stand void if Nifty pierces 8,160 mark on the down side. |
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