By Shrikant Chouhan
After the gap-down opening on Wednesday, the Nifty intensified selling pressure after the breakdown of 17700/17680 levels. The index has formed a long bearish candle on the daily chart and a lower top formation on the intraday chart, which supports further weakness from the current levels. We are of the view that the market structure is weak but oversold hence we may see a sharp pullback rally if the index manages to bounce back from the 17500 levels. On the upside, it would find resistance near the 17700 and 17750 levels. Below 17500 levels, it will witness a gradual decline towards 17400 or 17350 levels. Take a buy contra trade around 17500/17510 levels and keep an ultimate stop loss near 17450.
Stocks to buy
AB Capital: BUY
CMP Rs 140.5 | SL Rs 136 | TARGET Rs 150
After a promising uptrend rally, the stock is witnessing profit booking at higher levels. However, the short-term texture of the market is still on the positive side. currently, the stock is trading near an important retracement support level. We are of the view that the stock has completed one leg of correction and the strong possibility of a fresh uptrend rally is not out if the stock succeeds to trade above 136. Above which it could move up to 150.
Axis Bank: BUY
CMP Rs 838 | SL Rs 820 | TARGET Rs 870
After a short-term correction, currently the stock is trading near an important support level. in addition, the momentum indicators suggesting the stock is in into the oversold conditions and high chances of a quick pullback rally from the current levels are not ruled out. for the positional traders now, 820 would act as a sacrosanct support level. Above which the stock could move up to 870.
Coal India: BUY
CMP Rs 215 | SL Rs 209 | TARGET Rs 225
Post-short-term correction, the stock took the support near 200 days SMA (Simple Moving Average) and reversed. from the last couple of weeks, the stock is consolidating near 200 day SMA. The texture of the chart suggests high chances of a fresh uptrend rally from the current levels.
CMP Rs 2200 | SL Rs 2160 | TARGET Rs 2280
After a short-term correction, the stock consistently formed higher high and higher low series formation which is broadly positive. It also comfortably trades above the 50 and 20-day SMA (Simple Moving Average) mark. We are of the view that the short-term formation is still into the positive side and as long as, the stock is trading above 2160 or 50-day SMA the uptrend wave is likely to continue.
(Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities. The views expressed are author’s own. Please consult your financial advisor before investing.)