By Shrikant Chouhan

The benchmark indices witnessed a strong uptrend rally on Tuesday, with Nifty rallying over 170 points while the BSE Sensex gained by 508 points. Among Sectors, all the major sectoral indices traded in the green but Pharma and Healthcare indices outperformed, rallying over 3 per cent. Technically, after a sharp reversal formation on Monday, the index opened with a gap up but after a strong opening, in the late afternoon it witnessed some profit booking at higher levels. In addition, near the 20 day SMA (Simple Moving Average) indices have formed Hammer candlestick formation, which is broadly negative for the market. We are of the view that the short-term support has shifted to 17700/59400 from 17500/58800. A dismissal of 17700/59400 could accelerate the selling pressure. As a result, below 17700/59400 the chances of hitting 17600-17500/59000-58800 would turn bright. On the flip side, above 17700/59400 the index could retest the level of 17950-17800/60000-60300. 

Also read: Petrol, Diesel Price Today, 21 Sep 2022: Fuel cost steady; check rates in Delhi, Mumbai, Noida, other cities

GAIL
BUY, CMP: Rs 90.90, TARGET: Rs 96, SL: Rs 88

The counter is trading in a range bound mode with decent volume activity near its demand zone. The formation suggests that the stock is into the accumulation phase. Moreover, the recent formation of a bullish harami candlestick pattern is indicating a strong reversal from the current levels in the coming horizon.

Dr Reddy’s Laboratories
BUY, CMP 4216, TARGET 4420, SL 4130

On the weekly scale, the stock is seen consolidating in a range and currently, it has rebounded from the lower boundary of the range. The structure suggests reversal of trend and bullish strength for a fresh up move from the current levels.

Tata Communications
BUY, CMP: Rs 1,219.6, TARGET: Rs 1,280, SL: Rs 1,190

After hitting the recent highs of around 1280, the stock dropped on the lower side. However, it has found support near the important retracement zone and reversed its trend. As a result, the pullback rally is very likely for further up move in the near term.

Housing Development Finance Corporation
BUY, CMP: Rs 2,486.25, TARGET: Rs 2,620, SL: Rs 2430

On the monthly scale, the stock has presented a robust rally. After a breather of a few trading sessions and a pause in the momentum within a range, finally the stock has given a breakout. Therefore, short-term texture is looking attractive for bullish continuation formation from the current levels.

Also read: Rupee likely to trade volatile amid risk aversion in equity markets; USDINR to trade sideways in this range

(Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities. Views expressed are the author’s own.)