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Nifty above 16940 may hit 17200, momentum indicators signal possibility of pullback rally; Buy Cipla, LTI

Momentum indicators suggest a strong possibility of pullback rally in BSE Sensex and NSE Nifty 50 from the current levels.

Nifty above 16940 may hit 17200, momentum indicators signal possibility of pullback rally; Buy Cipla, LTI
The intraday texture of the market is non-directional, hence level based trading would be the ideal strategy

Shrikant Chouhan

Technically, after a sharp fall, the NSE Nifty 50 index opened in the green on Tuesday but corrected sharply at close. After an early morning selloff, the index witnessed range bound activity. Lower top formation intraday charts and bearish candle on daily charts indicating continuation of weakness in the near term. However, momentum indicators suggest a strong possibility of pullback rally from the current levels. We are of the view that, the bearish sentiment in the market is still intact and a fresh pullback rally is possible, if Nifty 50 and BSE Sensex succeed to trade above the 200 day SMA (Simple Moving average) or 16940/56950. Above which, indices could retest the level of 17150-17200/57500-57700. On the flip side, below 16940/56950, these could slip till 16850-16800/56600-56500. The intraday texture of the market is non-directional, hence level based trading would be the ideal strategy for the day traders.

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L&T Infotech
BUY, CMP: Rs 4,513.05, TARGET: Rs 4,740, SL: Rs 4,420

The counter had been in a declining trend in the past many sessions. However, at present there is a pause in its downward movement due to its strong multiple support levels. As the stock is available near to its demand zone, which could act as a strong base, simultaneously making it a favorable candidate in terms of risk and reward.

CIPLA
BUY, CMP: 1,098.7, TARGET: Rs 1,150, SL: Rs 1,075

On a broader time frame, the stock had been in a strong uptrend move. The fresh breakout move with a strong bullish candlestick along with the rise in volume activity on the daily charts indicates the beginning of a new uptrend from current levels.

India Cements
BUY, CMP: Rs 231.6, TARGET: Rs 245, SL: Rs 225

After hitting the recent highs of around 299, the stock dropped on the lower side. However, it has found support near the important retracement zone. As a result, the pullback rally is very likely for further up move in the near term.

IndusInd Bank
BUY, CMP 1165.1, TARGET 1225, SL 1140

The counter had witnessed a quite strong sell off in the last couple of trading sessions. However, the downward movement has taken a pause at the moment as the counter has found support. The formation indicates the stock is very likely to resume its new leg of the uptrend in the coming horizon.

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(Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities, Views expressed are the author’s own.)

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