By Shrikant Chouhan
Profit booking continued in the Indian benchmark indices, the NSE Nifty 50 ended 147 points lower while the BSE Sensex was down by 497 points. Among sectors, except Media all the major sectoral indices registered profit booking at higher levels. Amid sectoral indices, IT index lost the most, shed over 2.8 per cent. Technically, on intraday charts, the indices have maintained lower top formation, it also formed bearish candle on daily charts which suggest further correction from the current levels.
For the traders now, 16600/55600 would act as an immediate resistance level. Below the same, the correction wave is likely to continue till 16400-16350/55000-54800. On the flip side, a fresh uptrend rally is possible only after the 16600/55600 breakout. Above which, the index could retest the level of 16700-16735/55900-56000. Contra traders can take a long bet near 16350/54800 with strict 16300/64650 support stop loss.
Stocks to buy
L&T Finance Holdings
BUY, CMP: Rs 72.45, TARGET: Rs 77, SL: Rs 70
For the past few sessions, the stock is into a range bound mode with a higher low series formation. Meanwhile, on the daily scale, it has formed an ascending triangle chart pattern. The structure indicates breakout from the current levels and the beginning of a new up move in the counter.
SBI Cards and Payment Services
BUY, CMP: Rs 892, TARGET: Rs 940, SL: Rs 870
The stock 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 for the counter. Therefore, upward movement from the current level is very likely to remain in the near term.
BUY, CMP: Rs 360.8, TARGET: Rs 380, SL: Rs 352
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 near term.
BUY, CMP: Rs 202.3, TARGET: Rs 213, SL: Rs 197
The stock has given a breakout of the ascending triangle chart formation, which clearly suggests bullish momentum to remain in the short term. In addition, on the weekly scale, the stock has formed a higher bottom formation indicating good strength in the counter for fresh upward movement.
(Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities, Views expressed are the author’s own.)