By Shrikant Chouhan
On Tuesday, the benchmark indices witnessed range bound activity. Nifty ended 13 points higher while the Sensex was up by 49 points. Among sectors, the Nifty PSU Bank index bounce back sharply, rallied over 4 percent, whereas the Nifty IT index lost the most, shedding over 1.30 percent. Technically, after a pullback rally, the market opened with a gap up but once again, the indices found resistance near 17,750/59,800.
Currently, the market witnessing range bound activity. We are of the view that, as long as the market is holding 17,500/59,000 support zone, the pullback formation is likely to continue. Above the same, the indices could move up to 17,800-17,850/60,000-60,100. On the flip side, below 17,500/59,000, we could see a sharp selloff. Below 17,500/59,000, the indices could slip till 17,400-17,350/58,700-58,600.
Stock Recommendations
Canara Bank
BUY | CMP: Rs 304.25 | TARGET: Rs 320 | SL: Rs 297
After a short-term correction, the stock took the support and reversed its trend. Post reversal, it has formed double bottom chart formation on the daily scale. Therefore, the overall pattern offers buying opportunity for the positional traders with a decent risk-reward ratio.
Larsen & Toubro
BUY | CMP: Rs 2121 | TARGET: Rs 2230 | SL: Rs 2075
The counter had been in a declining trend in the past few sessions. However, at present there is a pause in its downward movement due to its strong multiple support levels. The stock is available near to its demand zone, which could act as a strong base in the coming horizon. Hence, bullish trend is expected to resume from the current levels.
Bharat Forge
BUY | CMP: Rs 876.65 | TARGET: Rs 920 | SL: Rs 855
The counter is trading into a range bound pattern for the past few trading sessions. Nevertheless, the structure of the chart formation and incremental volume activity on daily charts hints at a resumption of the bullish trend from the current levels.
DLF
BUY | CMP: Rs 356 | TARGET: Rs 375 | SL: Rs 345
The stock had witnessed intense sell off from the higher levels. However, at present it has formed a base near its support zone along with a doji candlestick formation. Hence, the structure is indicating reversal from current levels for a fresh leg of up move in the near term.
(Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities. The views expressed are the author’s own. Please consult your financial advisor before investing.)