By Shrikant Chouhan
The benchmark indices witnessed sharp recovery, from the day’s lowest level the Nifty 50 and BSE Sensex recovered over 400 and 1,500 points, respectively. Among sectors, except the IT index, all the major sectoral indices were traded in the positive territory. Due to strong buying interest, the PSU Bank index rallied over 4 per cent. Technically, after an initial sell-off, the Nifty 50 index reclaimed the 17000 and Sensex 57000 mark. Post strong intraday reversal formation, the entire day it was trading above the level of 17000/57000.
The short-term formation is still on the weak side, but the intraday texture suggesting a continuation of pullback is likely to continue in the next couple of trading sessions. For the traders, now 17000/57000 and 17100/57350 would be the immediate support zone if the Nifty and Sensex succeed to trade above the same, then reversal formation will continue till 17400-17450/58100-58300. On the flip side, below the 17100/57350 uptrend would be vulnerable.
Larsen & Toubro (L&T)
BUY, CMP: Rs 1,925.3, TARGET: Rs 2,020, SL: Rs 1,880
On a broader time frame, the stock had been in a strong uptrend move, however, some profit booking was seen from its higher levels so the counter has plunged to its important support area, as a result, we expect the pullback rally in the coming sessions.
BUY, CMP: Rs 380.25, TARGET: Rs 400, SL: Rs 370
On the weekly scale, the stock is consolidating in a broad range and currently, it is available near the lower boundary of the range, additionally, on the daily chart, a reversal is evident from the triple bottom support zone for further upward movement.
Indian Oil Corporation (IOCL)
BUY, CMP: Rs 121.45, TARGET: Rs 128, SL: Rs 118
After the remarkable up move the counter witnessed gradual price decline however post reversal from the trend line support, the counter is trading in a rising channel formation on the daily chart, which is indicating bullish momentum to sustain in the coming days.
BUY, CMP: Rs 1,488.05, TARGET: Rs 1,565, SL: Rs 1,455
The counter had witnessed a downtrend after hitting the resistance zone of 1570, however, post correction bulls got into action and eventually, the stock took support near the important retracement zone, moreover, the incremental volume activity near the support area is indicating the fresh uptrend from the current levels.
(Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities, Views expressed are the author’s own.)