Analysis - July 6, 2020

DISCLAIMER : THIS IS A BLOG TO TRACK MY PERSONAL ANALYSIS. SHARING IT TO PEOPLE FOR EDUCATIONAL PURPOSE ONLY. I AM NOT SUGGESTING A TRADE BASED ON THE LEVELS GIVEN HERE

The market surprised everyone as benchmark indices rallied for the third consecutive week which ended on July 3, despite rapid rise in COVID-19 cases. Hopes of the economy gradually getting back on track, coupled with positive global cues, manufacturing PMI, auto sales data and progress over a vaccine against the novel coronavirus lifted sentiments.

Nifty50 climbed over 2 percent and hit nearly four month-high during the week, taking the total three-week gains to more than 6 percent. 

Lets see what happened as per the analysis on July 3, 2020 let us see what happened

Reliance Industries

As expected, the CUP formation is nearing completion. Reliance opened the day around 1775 levels and was trading in a 10 point range during the first session. During the second it broke that range to go to the 1790 levels and closed at 1787.

So, the last week saw a good recovery (almost 80 points) to come close to 1800 levels. With more positive news flowing in, the downside seems limited. Reliance could consolidate a bit around here and make a leap to the 2000 levels shortly if the global cues stay positive.

Per the weekly chart, we just closed a tinge above the trendline - hopefully it is a real breakout and not a fake one.

Per the XABCD patten, there could be a possible reversal may be due to profit booking around the levels of 1795/1816. As long as 1760 holds good, it is certain that we will see higher levels. This reversal could also signify an handle for the CUP :) 

Intraday Levels:

Buy above:

1780 - Target 1790/1800/1815

Sell Below :

1815 - Target 1800/1790

1790 - Target 1780/1760

Bharti Airtel

Bharti printed a very bullish belt hold candle on July 3. As expected, 558 served a strong support and per the XABCD pattern from June 29, as the level 564 crossed, the trendline was easily broken at 573 to reach 580 levels.

We can expect a reversal from the 583 per the harmonics and at this point Bharti appears to be a buy on dips. It is poised to retouch 600 levels soon if 580 levels hold.  So Monday, expect Bharti to fall a bit and it would be a great opportunity to gain entry around 570 levels for a target above 600.

The chart below shows a nice breakout of the flag pattern in the daily timeframe with a solid GREEN candle indicating higher levels.

Intraday levels:

Buy Above :

574 - Target 581 / 585 / 593

Sell Below :

573 - Target 564 / 558

558 - Target 550 / 546/541

LIC Housing Finance

It was a bearish day in LICHSGFIN, opened at 284 and made a low of 271 to close at 274. Per the XABCD, if we have a decisive close above 279, we can see 290 levels. 

One the weekly chart, a nice spinning top has been formed. If LIC trades below 269 on Monday, it could be a bearish week. If it trades above 274, we could see the levels of 290 again next week.

Intraday Levels:

Buy above:

274 - Target 279/284

284 - Target 287/292

Sell Below:

279 - Target 273 / 270 

270 - Target 265

HDFC Bank

Banks were under performing last week. HDFCBank showed a lot of good momentum in the early part of the week but gave up the gains on July 2nd and 3rd. We have an 'Evening Star Pattern' (sort of) and if HDFCBank trades below 1070 can see some more correction.

Per the 4-point ABCD pattern, 1066 should provide some support and below that the 5-point XABCD 'B' point at 1019 will give support.