By Shrikant Chouhan
The benchmark indices corrected sharply, as the Nifty 50 shed over 195 points whereas the BSE Sensex was down by 554 points. Among sectors, all the major sectoral indices registered technical selloff but reality lost the most, shedding over 2.5 per cent. Technically, on daily charts the Nifty/ Sensex has formed a long bearish candle which suggests further weakness from current levels. In addition, on intraday charts, both have formed lower top formation which also indicate continuation of weakness in the near future.
However, after a sharp intraday correction, currently the index is trading near an important support level. We are of the view that, the intraday formation is still in to the weak side and now 18225-18250/61000-61200 would act as an important hurdle for the day traders, below the same the correction wave will continue up to 18050-18020/60500-60400. Contra traders can take long bets near 18020/60400 with strict 17980/60225 support stop loss. The market is volatile and will remain volatile in the near future hence level based trading would be the ideal strategy for the day traders.
BUY, CMP: Rs 725.2, TARGET: Rs 760, SL: Rs 710
Post sharp up move from the levels of 660 the counter witnessed bit of a profit booking, however, the downward momentum has taken a pause and a rounding bottom chart formation is seen on intraday charts which suggests a revival of the uptrend from the current levels for further bullish movement.
JK Tyre Industries
BUY, CMP: Rs 140.05, TARGET: Rs 150, SL: Rs 135
For the past few weeks the stock is into a tight range with a higher low series formation, meanwhile, on the daily scale, it has formed a Ascending Channel chart pattern, the incremental volume activity indicates breakout and the beginning of a new up move in the counter.
BUY, CMP: Rs 943.7, TARGET: Rs 990, SL: Rs 925
After the strong declining trend, the stock is seen trading in a broad range for the past many sessions, and presently it is near the breakout zone of the resistance area. Hence, the recent price and volume action suggest a strong breakout in the coming sessions.
On the daily time frame, the counter has formed a Cup and Handle chart pattern and the structure indicates breakout from resistance zone in the near term for fresh up move.
(Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities. Views expressed are the author’s own.)