By Shrikant Chouhan
The benchmark indices continued profit booking at higher levels, after a sharp correction, the Nifty ended 224 points lower while the Sensex was down by 796 points. Among Sectors, almost all the major sectoral indices witnessed intraday profit booking but Metal index was top looser, shed over 1.5 percent. Technically, after a gap down opening the index intensified the selling pressure, it also breached 20,000 mark and succeeded to close below the same, which is largely negative. We are of the view that the intraday market texture is weak but due to temporary oversold conditions we could see range bound activity in the near future. For the bulls now, 20,000- 20,030 could act as an immediate resistance areas while 19,825-19,775 could act as a crucial support zone for the traders. For day traders, Buying on dips and selling on rallies would be the ideal strategy.
Stock Recommendations
Mahindra & Mahindra Financial Svcs
BUY | CMP: Rs 309.45| TARGET: Rs 325 | SL: Rs 302
The stock has given a breakout of its Ascending Triangle chart pattern along with a strong bullish candlestick pattern and rising volume activity on the daily chart. Additionally, major technical trend indicators such as ADX and Stochastic are indicating strength for further movement.
Container Corporation of India
BUY | CMP: Rs 742 | TARGET: Rs 780 | SL: Rs 725
On the weekly scale, the counter is trading into a rising channel pattern forming the higher top and higher bottom series continuously. The strong bullish activity on the daily chart suggests that the counter is likely to maintain bullish continuation formation in the coming horizon.
Persistent Systems
BUY | CMP: Rs 5,785 | TARGET: Rs 6,070 | SL: Rs 5,670
After a remarkable rally of the past few weeks, the stock went into a consolidation mode. At present, the structure is indicating a bullish continuation chart formation along with a decent volume activity. Hence, the formation indicates a bullish trend to resume from the current levels.
Eicher Motors
BUY | CMP: Rs 3,438 | TARGET: Rs 3,600| SL: Rs 3,370
The counter is trading into a range bound mode for the last few sessions, and presently the counter is near the breakout line of the rectangle chart pattern. Therefore, the recent price action indicates a breakout for a new leg of up move in the coming trading sessions.
(Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities. Views expressed are the author’s own. Please consult your financial advisor before investing.)