Nifty likely to break out above 10,700; ITC a good short term buy

Jaydeb Dey

The Niftyon Friday ended 0.57percent lowerat 10,618.25. Negative opening followed by retracement towards 10,600 levels led to end the session with a bearish body candle. Days low was 10,601.60.

Benchmark Index settled on weaker note on the last session of the week. Hence, in case of pullback it may again face resistance around 10,700 levels. On the weekly chart it ended 0.69percent lower. A minor correction against 6 weeks of consecutive uptrend ended with a bearish shooting star candle. However, primary trend suggests it may again see aggressive buying on dips.

On the Nifty hourly chart; it ended just above the 100 EMA. Chart pattern suggests a pullback is likely. However, upside resistance around 10,700 has to be taken out towards unfolding a rise up to 10,780.

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Nifty patterns on multiple time frames show; it ended the week on a weaker note compared to previous weeks. However, the primary trend suggests Nifty may see buying on dips. Upside resistances are placed around 10,700 and 10,780.

The Bank Nifty previous session ended 0.16percent up at 25,645.40. Upside resistance is placed around 25,750. Downside pivotal support is placed around 25,340.

Based on thorough technical study,the research firm recommendsITC which can give up to 5percent return in the near short term:

ITC| Rating:Buy | Target: Rs 290, stop loss: Rs 267, Return: 5%

After reacting down from the critical resistance placed round Rs 290 levels the stock is again coming down to its pivotal support placed around Rs 275 levels.

Based on above mentioned observation,the house recommends ITC as a Buy for the short-term upside target of Rs 290.

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

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