Best intraday stock to watch out for on July 22
On Thursday, Nifty advanced 0.51% and it managed to close above 16600 mark.
On the daily chart, the index has formed a Bullish outside bar. Despite forming an outside bar, it is still at the channel resistance line, it is better to wait for a breakout or a reversal. The current upswing is 24 sessions old and rallied 1424 points or 9.38%. The previous longest swing was 27 days which rallied 15.4% during May. The 100EMA is in an uptrend, which is currently at 16437, this will act as major support for now. The 100DMA is also acting as support for the last two days, which is at 16525, and it is an immediate support. Only below this level Nifty can change its direction towards the downside.
Most importantly, the index closed above Bollinger Bands, which is an indication of an overextension of the trend. During the current major downtrend, Nifty never extended beyond Bollinger Bands. Hence, this phenomenon is giving perplexing signals to the traders, who are left to wonder whether this is a dead cat bounce or a reversal of the trend! Given the fact that we have seen a strong closing, no indicator shows a negative bias. On the other side, the rally is extended and is at a crucial resistance. So, it is better to have a light position or book profit and sit on the sidelines for the time being.
The stock took support at the 20DMA and closed just 0.73% above it. It has faced resistance at the sloping trendline. The Elder impulse system has formed a strong bearish candle. The MACD is about to give a sell signal. The RSI is below it 9 and 20 periods average, which is bearish. The higher volume for the last two indicates the distribution. The TSI and KST is also about to give a sell signal. On an hourly chart, it is below the moving average ribbon along with the MACD line below the zero line. In n short, the stock is at crucial support. A move below Rs 2235 is negative, and it can test Rs 2140. Maintain a stop loss at Rs 2265.
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