Contra buying is advisable between 18250 and 18200 levels and for that keep a stop loss at 18100
By Shrikant Chouhan
On Tuesday, the market finally came down with the support of the broader market. The sectors other than technology closed in the negative territory. The Nifty 50 index was at 18604, however, it closed at 18419 at the lowest point of the day. On a daily basis, the market closed at the lowest level of the previous day after a continuous run of nearly 12 days. During the same period, the market increased by 1150 points, however, the market must have taken a breather as the run-up was overextended.
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Technically, the market is finding support between the 18400 to 18350 levels. However, it is advisable to buy with a reversal of the uptrend or a stop loss at the 18300 level. On the higher side, resistance exists at the 18500 and 18550 levels. Contra buying is advisable between 18250 and 18200 levels and for that keep a stop loss at 18100. On the other hand, contra sell is advisable at the levels of 18550 and 18600, however, for that we need to keep a tight stop loss at 18630.
Stocks to buy
L&T Finance Holdings
BUY, CMP: Rs 92.25, TARGET: Rs 99, SL: Rs 89
The stock is trading into a rising channel pattern forming the higher top and higher bottom series on the weekly scale, post-breakout the counter witnessed a bit of a selling pressure which resulted in retesting of the trend line. Thus bullish continuation from the current level is very likely to remain in the near term.
BUY, CMP: Rs 184.5, TARGET: Rs 195, SL: Rs 179
The stock had given a very impressive up move in the recent past by forming a bullish continuation chart pattern, presently due to some profit booking, there is a momentary pause in the uptrend however it seems that a strong reversal is very likely from the double bottom support zone on the daily chart for further upward movement.
BUY, CMP: Rs 1,539.1, TARGET: Rs 1,620, SL: Rs 1,505
Post its decline from the levels of 1540 the counter went into a narrow range-bound movement and it came out of the range with a series of strong bullish candlestick patterns which should move the stock further on the higher side in coming sessions.
HDFC Life Insurance Company
BUY, CMP: Rs 702.8, TARGET: Rs 740, SL: Rs 685
The counter had been in a strong uptrend move however the recent price correction from its supply zone has plunged the counter to its important retracement support area, as a result the pullback rally is very likely from the current levels.
(Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd. Views expressed are the author’s own.)