Buy Axis Bank, Mahindra & Mahindra Finance shares; Bank Nifty faces resistance 38700

Buy Axis Bank, Mahindra & Mahindra Finance shares; Bank Nifty faces resistance 38700

By Rohan Patil

It was a very volatile and a mix bagged week for the benchmark index where prices started the week with a positive tick and closed in red for the rest of the three consecutive days and again closed in green to end the week and closed above 17700 levels. The prices are sustained well above their 21 & 50 – day exponential moving average on the daily as well as the weekly time frame. The index has formed Doji on the weekly time frame which indicates indecision among the traders.

The immediate support for the Nifty is placed near its 21 DMA which is placed at 17400 levels and the upper band of the index is capped at 18000 levels if the index is closed above the said levels then the gate for the prices is open till 18250 levels.

BANK NIFTY

BANK NIFTY witnessed a gap opening on Monday and despite the fall through the prices were not able to fill the gap created on 4th April and formed a Doji candlestick pattern on the weekly chart. The banking index closed above its six-week high and has given a weekly gain of more than one and a half percent. For the entire week, prices continue to trade above their 21 – day exponential moving average which is placed at 36750 levels.

Currently, prices on the weekly chart have halted near the resistance of a downward sloping trend line. The momentum oscillator RSI (14) has given a horizontal trend line breakout above 55 levels and the indicator has retested in this recent throwback near its trend line support.

The majority of the indicator & oscillators are reading in a higher high higher bottom formation and reading in bullish range shift zones. The immediate support for the Bank Nifty is placed near its 21 DMA which is placed at 36750 levels and the upper band of the index is capped at 38700 levels if the Banking index closes above the said levels then the gate for the prices is open till 39400 levels.

M&M Finance: BUYTarget – Rs 190 |Stop Loss – Rs 166Return 08.50%

M&MFIN has given a smart V shape reversal rally on the daily chart and has given more than 30 percent in just one month indicate bulls are back in action. The prices have given a falling trend line breakout on the daily chart which indicates a positive momentum is likely to continue to ahead. The momentum oscillator RSI (14) is reading in higher high higher low formation and has also given a horizontal trend line breakout above 60 levels on the daily time frame.

Prior breakout prices consolidated for almost 7 trading sessions and we witnessed above average volume activity during that period indicates accumulation stage for the counter. While looking at the overall price formation and fresh breakout we are expecting prices to trade higher towards 190 levels.

AXIS BANK: BUYTarget – Rs 850 | Stop Loss – Rs 760Return 07%

Axis bank is outperforming its peers stocks consistently from past few weeks and has given downward sloping trend line breakout on the daily time frame. After touching the lower band of the trend line which is near 660 levels counter closed above its five weeks high and has given handsome returns of 20 percent in just one month.

On 30th March prices closed above its (21, 50 & 100) day exponential moving average and since then prices never retested below its averages and continued to trade higher. On the broader time frame prices are moving out of a symmetrical triangle pattern which is a strong bullish signal. While looking at the overall price formation and fresh breakout we are expecting prices to trade higher towards 850 levels.

(Rohan Patil is a Technical Analyst at Bonanza Portfolio. Views expressed are the author’s own Financial Express Online does not bear any responsibility for their investment advice. Please consult your investment advisor before investing.)