On Anil Singhvi’s show, Kiran Jadhav recommends Exide Industries for solid gains

Kiran Jadhav recommends buying into Exide Industries, he said that stock has given a breakout after consolidating for 1.5 years. Exide Industries has formed a price pattern called the inverse head and shoulders pattern. The stock has crossed the option hurdle of 18 lk shares which is significant. This indicates that Exide Industries stock is ready for a big upmove. The first target on Exide Industries is Rs 220, and eventually it is heading towards Rs 229 – Rs 234 with stop loss of Rs 209.

The Nifty opened gap-up and has been trading with a positive bias since then. Currently, it is up by 190 points. On the hourly charts, we can observe that the Nifty has been trading in an upward sloping channel. Prices are trading along the expanding upper Bollinger Band, which indicates that the positive momentum is likely to continue. The hourly momentum indicator has triggered a positive crossover, which is a Buy signal. In terms of levels, 15180-15200 shall act as an immediate resistance zone, while 15000-14930 shall act as a support zone for the Nifty.

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On the hourly chart, the Nifty is trading above the 20-hour moving average (HMA) and the 40-HEMA, of 14912 and 14713, respectively. The hourly momentum indicator has a positive crossover. Market breadth is positive with 1264 advances and 558 declines on the National Stock Exchange (NSE).

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The Nifty maintained the rhythm of not correcting for more than a week and an average correction of 8-10%. In the process, the index respected key support of the 50 days EMA that coincided with a rising trend line around 13600, which has been held on multiple occasions since March 2020. This coupled with faster retracement of pre-budget corrective phase, signals robustness of price structure and further strengthening of medium term up trend. Consequently, weekly price action formed a strongest bull candle since April 2020, indicating inherent strength
 
Going ahead, ICICI Securities expects the index to head towards 15500 in coming months as revived momentum in cyclicals backed by strong market breadth makes us confident to reiterate our constructive stance. We believe traction in banking, infra, pharma and consumption would drive the index higher towards 15500, as it is 161.8% external retracement of past two week’s fall (14754-13596), at 15466. Key point to highlight is that the Nifty has rallied 1420 points over past five sessions, which hauled the daily stochastic oscillator in overbought territory (at 95), indicating a couple of days of temporary breather at higher levels cannot be ruled out. Therefore, capitalising on dips to go long in quality large cap and midcap would be the prudent strategy to ride the next leg of rally.
 
Broader market witnessed a faster pace of retracement during the week as it retraced past 14 session’s decline in just three sessions, indicating robust price structure that augurs well for further acceleration of upward momentum. In the process, the Nifty Midcap index recorded a fresh all-time high, whereas the small cap index is still 20% away from all-time high. Therefore, ICICI Securities expect small caps to witness catch up activity within broader market space.