By Shrikant Chouhan
On last Tuesday, the benchmark indices witnessed a pullback rally, the nifty ended 160.50 points higher while the Sensex was up by 563 points. Among sectors, some buying interest was seen in selective FMCG, and Infrastructure stocks, whereas despite strong momentum, PSU bank index corrected sharply, shedding nearly 2%. Technically, after a positive opening the market held positive momentum throughout the day.
A long bullish candle on daily charts and higher bottom formation on intraday charts indicates further uptrend from the current levels. For the trend-following traders now, 17,950 and 60,300 would act as a strong support zone for Nifty and Sensex respectively. Above these levels, the index could move up to 18,100-18,200 and 61,000-61,200 respectively. On the other side, below 17,950 and 60,300 levels, uptrend would be vulnerable. Below the same, Nifty could slip till 17900-17850 and Sensex may drop to 60,100-60,000.
Stocks to buy
CMP: Rs 332 | Target: Rs 350 | SL: Rs 323
On the daily chart, post reversal from its multiple support zone the stock is into a gradual up move and is into a rising channel pattern. The texture of the chart pattern suggest upward movement from the current level is very likely to continue in the coming sessions.
Tata Motors: BUY
CMP: Rs 414 | Target: Rs 435 | SL: Rs 405
After the sharp upmove, the stock is trading in a range-bound movement well above its short-term moving averages. As a result, the formation of a Flag chart pattern on the daily scale is formed which points to bullish movement to resume in the near term.
SBI Life: BUY
CMP: Rs 1,299 | Target: Rs 1,365 | SL: Rs 1,270
The stock is trading into a rising channel chart formation making the higher top and higher bottom on the weekly scale. As a result, all major technical trend indicators such as Macd and ADX are strong and steady. Therefore, upward movement from the current level is very likely to continue in the coming horizon.
Cummins India: BUY
CMP: Rs 1,494 | Target: Rs 1,570 | SL: Rs 1,460
From last few weeks, the counter is trading in an upward trend. Moreover, the counter has formed an inverse head and shoulder chart pattern on daily charts. Therefore, sustaining above the breakout of the range indicates a new leg of uptrend from current levels.
(Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities. The views expressed are the author’s own. Please consult your financial advisor before investing.)