The short term trend is still up but due to uncertain global conditions, the Nifty may prefer to trade within the range of 17650-17450/59300-58500.
By Shrikant Chouhan
After two days of sharp price correction, on Tuesday, the benchmark indices witnessed a sharp pullback rally from 17350/58300 support level. Post intraday correction, the Nifty took the support at 17326/58232 and reversed sharply. The intraday rally was largely supported by the Metal, Oil, and Gas and selective financial stocks. Whereas, despite strong momentum, Auto stocks witnessed selling pressure. Technically, the texture of the sharp reversal formation near 10 days SMA suggests a further uptrend from the current level. We are of the view that the short term trend is still up but due to uncertain global conditions the market may prefer to trade within the range of 17650-17450/59300-58500.
For the day traders, as long as the index is trading above 17450/58500 pullback rally is likely to continue up to 17600-17650 -17680/59150-59300-59500. On the flip side, below 17430/58500 uptrend would be vulnerable.
Stocks to buy
BUY, CMP: Rs 166.35, TARGET: Rs 175, SL: Rs 162
Post correction from the highs of around 205 the stock went into an accumulation phase, eventually, it has formed a bullish engulfing candlestick pattern with rising volume near support zone which suggests a fresh leg of uptrend in coming trading sessions.
BUY, CMP: Rs 156.4, TARGET: Rs 165, SL: Rs 152
The counter has shown a remarkable up move in recent times and after hitting the high of around 161 there is a pause in momentum, however currently, on intraday charts, it has reversed sharply from its double bottom support zone which indicates that the counter has potential for a further bullish up move from the current levels.
BUY, CMP: Rs 2085.85, TARGET: Rs 2190, SL: Rs 2040
Post sharp upward rally without any major correction some bit of a profit taking is seen in the counter which resulted in a price drop, nevertheless, a strong reversal is very likely from the support of the retracement zone for further upside in the near term.
On the daily time frame, after the sharp up move, the stock was into a consolidation phase however currently, on intraday charts, it is trading in a triangle chart pattern which indicates that the counter has sufficient upside potential from the current levels.
(Shrikant Chouhan is Executive Vice President, Equity Technical Research at Kotak Securities. Views expressed are the author’s own.)