The benchmark indices continued the positive momentum fourth day in a row, the Nifty ended 161 points higher while the Sensex was up by 582 points. Among Sectors, IT, FMCG and Financial indices gained over 1 percent whereas intraday profit booking were seen in PSU Banks and Auto stocks. Technically, after a strong opening the market held the positive momentum throughout the day, after a long time the Nifty closed above the 200 day SMA (Simple Moving Average) level and it also formed a long bullish candle on daily charts which is broadly positive.
We are of the view that, the short term structure of the market is robust but due to temporary overbought conditions we could see some profit booking at higher levels. For the day traders now, 17,600-17,650/60,000-60,100 would be the immediate resistance level while 17,450-17,400/59,400-59,200 would act as the key support zone for the day traders. However, below 17,400/59,200 uptrend would be vulnerable.
Stock recommendations
Berger Paints
BUY | CMP: Rs 591.95 | TARGET: Rs 620 | SL: Rs 580
The counter is into a gradual up move with a higher low series on the daily chart. Additionally, it has formed a Cup and Handle chart pattern with a decent volume on the weekly scale. Therefore, the breakout of the range for moving further upside is very likely to occur in the near term.
Hindustan Unilever
BUY | CMP: Rs 2584 | TARGET: Rs 2720 | SL: Rs 2530
The stock is trading into a rising channel pattern after reversal from the lower levels and forming the higher lows series continuously on the weekly scale. The strong bullish engulfing candlestick pattern on the daily chart suggest that the counter is likely to maintain bullish continuation formation in the coming horizon.
Tata Communications
BUY | CMP: Rs 1269.5 | TARGET: Rs 1330 | SL: Rs 1240
The counter is trading in a rising channel constantly. The higher high and higher low chart formations are apparent in the counter. Additionally, trend indicators such as MACD and ADX are showing bullish strength. Therefore, upward movement from the current level is very likely to remain in the near future.
IndiGo
BUY | CMP: Rs 1928 | TARGET: Rs 2020 | SL: Rs 1890
For the last few weeks, the counter was stuck in a range bound movement and presently we witnessed a range breakout. Moreover, the closing above its resistance zone suggests that the counter has good potential for further upside.
(Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities. The views expressed are author’s own. Please consult your financial advisor before investing.)