- The pattern analysis on the weekly timeframe shows that the price action has entered into its stage 2 following a brief consolidation phase.
- The lateral trend following a 71% decline is a potential sign of accumulation and an indication that the drawdowns were finally arrested.
- The pattern analysis on the daily timeframe shows that the price action is trading in a potential volatility contraction pattern.
- This potentially indicates that the smart hands are using the dips at elevated levels as an opportunity to absorb available supply in the market.
- The closing on 16th August came on a strong note and saw sharp surge in the price momentum which resulted in causing an imbalance among the sellers in an attempt to weaken them further.
- This zone of imbalance combined with 61.8% retracement levels, the levels of 689-617 is reckon to act as a strong support zone.
- The 50 period volatility on the daily timeframe remains at lower levels and hence the chances of any unruly moves is less likely.
- The RSI across daily and higher timeframe is trading well above its median without showing any divergence against the price.
- We reiterate a buy on Nazara Technologies for the target of 821 and limit the risk to 657.
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