Nestle India (Cash):
- Looking at the weekly chart, stock formed an ‘Ascending Triangle’ pattern and it manage to confirm its breakout by posting a record weekly close above its previous peak of around 7142 (weekly close of March 13, 2015).
- The weekly as well as the monthly RSI (14) entered above 60 marks which support our bullish hypothesis.
- The volume activities since last two weeks has also pick-up along with the good delivery mark.
- Combining the above technical evidences, we advocate positional traders to accumulate this stock at current level of 7205 with a price target of 8850 first and in case of further optimism stock may rally towards 9500. Strict stop loss should be placed at 6375 as any break below this level will void our bullish view.
Castrol India (Cash):
- Looking at the daily chart, stock has been under pressure and formed Lower Top Lower Bottom formation.
- During the recent fall, stock registered a low of around 368 and rebound towards 395 / 398 zone.
- If we look at the daily chart, 395 / 398 zone was previously acting as a near term support. However, post the breakout it has reversed its role and is acting as an strong resistance and price failed to close above this zone during last week.
- This zone coincided with the 61.8% retracement of its previous corrective move along with the daily 89-EMA.
- The daily RSI (14) came near its resistance of 60 levels.
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- Considering the above technical pattern, we expect this stock to resume its down trend hence we recommend traders to build short position at cmp of 392 with a price target of 355. Stop loss should be placed at 408.
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