See Nifty at 10,850 if it closes above 10,650 levels; these 5 bets could return 6-18%

Narnolia Financial Advisors sees support for the Nifty at 10,500 and 10,440 levels on the downside.

Bears have been left bruised due to the ongoing recovery in the dollar-rupee and decline in crude oil prices. After a counter-attack by bulls from the lows of last week, the Nifty closed almost near its weekly highs and gave a decisive break out of the tight range 10,450-10,650, which indicates strong bull power at the lower end.

On Friday, Nifty future saw additional open interest (OI) build-up of 5.67 lakh shares, totalling to 2.43 crore. A higher closing along with an increase in OI clearly indicates fresh long build-up in index futures contracts. The probability of upside till 10,750-11,085 (50 percent to 61.8 percent retracement of the recent down move) certainly looks open on the cards since it decisively closed above 10,650 levels.

Moreover, momentum indicator relative strength index (RSI) is looking firm and trading above 50, which suggest further move on the upside. At the same time, occurrence of one of the most important bearish formation of moving averages -- Death Cross -- in the Nifty suggests a sell on rise strategy in the mid-term. The 50 and 200 daily moving average and unfilled bearish gap between 10,755 and 10,821 confirms strong resistance near 10,750-10,800.

The Nifty has to hold above 10,650 levels to witness an up move towards 10,750 and 10,850 levels. On the downside, supports exist at 10,500 and 10,440 levels.

The banking index closed in positive territory last week and gave a breakout above its immediate trading range by closing above 26,050 levels. Since it is also trading above all major moving averages, the short term trend looks positive and immediate resistance is only around 26,500 and 26,800 levels.

Prices of Dilip Buildcon has seen a sharp rebound after hitting a low of Rs 400. Recently it has taken support from the line of polarity on weekly time frame suggest strong support on the lower side. It has witnessed heavy volume around Rs 420 levels, from where it is catching momentum on the upside. Sustainability of RSI above 50 is also implying upsurge move. Immediate swing resistance lies around Rs 600 & support at Rs 400, the aforementioned rationale suggests buying in the scrip around Rs 465 for the target of Rs 550 with a stop loss of Rs 419 as a good bargain hunting opportunity.

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