Over the past one year, the stock was not able to move above its multi-point resistance zone of 1750-1800. Presently, the prices were under a symmetrical triangle formation, and they have attempted to break out of the pattern. The daily MACD has shown a positive crossover, and it is now bullish while trading above its signal line. In the process, the price has closed above the upper Bollinger band, and this increases the possibility of a breakout. The RSI has marked a fresh 14-period high with a bullish divergence against the price. Any Close below 1580 will be a stop-loss for this trade.
MARICO| Buy Above: Rs 390 | Target Price: Rs 405
The stock has been under a massive pattern formation, and over the past several weeks, it has considerably narrowed its range. As of now, the price has moved above its 50-DMA and 200-DMA and is again attempting to move beyond the multiple resistance points of 385-390. The MACD has shown positive crossover on both the time frame charts, and it is now bullish while trading above its signal line. The RSI is seen taking pattern support and inch higher. Some upward revision in the price cannot be ruled out over the coming days. Any close below the 382 levels should be treated as a stop-loss of this trade.
CAMLINFIN| Buy Above: Rs 58 | Target Price: Rs 66
Though the price has moved in a very well defined range over the past couple of months, it has regularly marked higher lows in the process. The stock has penetrated and closed above the 50-DMA and 200- DMA levels and is likely to move towards its upper band of the trading range. The daily MACD has turned positive; it is bullish and trades above its signal line. The PPO, too, has turned positive. Amy close below 52 should be treated as a stop-loss for this trade.
The stock has shown signs of a pullback and a potential bottom formation after a sustained corrective decline from 132. While the stock marked a lower bottom, the RSI showed a bullish divergence; when the price started to move up, the RSI moved up in sync with the price. The MACD has shown a positive crossover; it is bullish and trades above its signal line. The stock may show a technical rally from these levels. Any close below the 84 levels should be treated as a stop-loss for this trade.
HEDGED OPTION CALL
The options data as of Friday Close for the October 24, 2019 expiry shows that BANKNIFTY has maximum Call OI built up at 29500. The highest Put OI stays at 28500 strikes. BankNifty is expected to remain volatile and trade in a broad but defined range.
Sell BANKNIFTY 24OCT 28900 CALL at 471.05 and Sell BANKNIFTY 24OCT 29400 PUT at 509.70. Receive Net Premium of Rs. 19615. Maximum Profit Potential: 9615. The trade will remain profitable above 28419 and below 29880.
(IMPORTANT: The Option Prices shown are as of Friday’s Close. The Pay-off Chart, Maximum Loss and Maximum Profit Potential can vary as per the actual execution price)
Milan Vaishnav, CMT, MSTA, is a Consultant Technical Analyst and founder of Gemstone Equity Research & Advisory Services, Vadodara. He can be reached at firstname.lastname@example.org