Positional call – buy BAJAJ AUTO above 1940 closing sl 1800 target 2050-2220
holding period 2-3 month, if stock able to give close above our entry price then only hold the delivery.
technical chart reading –
As per the price chart we can see that bajaj auto able to move above its 100 days moving average and not its trading near its 200 days moving average which is at 1905 level.
on 5th septermber 2013 and 6th sep 2013 it has given a DOJI candle on chart, so if stock able to give close above our desire level then we can see up move in this, doji candle is always give a hit of reversal in price, so as per the candlesticks if price not able to give close above desire level and if it move below doji’s low and give close below that, means below 1870 level then stock will reverse from here in selling also.
another thing we can consider is it has made the falling wedge pattern on chart and recently given a breakout moving out of the wedge pattern, wedge is having a width of 250 points and wedge breakout done at 1800-1850 range so upside we can expect 250 points move from this level, and it will come till 2050-2100 range.
if we look at the RSI we can see that recently price has given a decent fall but RSI unable to move into oversold zone and started to move upside again, even it has broken the resistance line on chart, so RSI showing a more scope for up move on chart and this can lead for more price action in upper side.
overall condition shows us that price need to give close above our desire level to see the price action in market, before this level we cant expect any action in price.