Technically, on intraday charts, the Nifty 50 index has formed a triple top kind of formation.
By Shrikant Chouhan
The benchmark indices opened with a gap due to exceptional strength in the global cues, the market has managed to surpass the level of 17400 but due to lack of follow-through buying it trimmed all intraday gains and eventually closed near to the day’s lowest level which is broadly negative. Among sectors, strong buying interest was seen in Media stocks, as a result, Nifty Media index registered an exceptional rally of over 14 percent.
Technically, on intraday charts, the Nifty 50 index has formed a triple top kind of formation. We are of the view that the market is still trading within the trading range and for the bulls, 17450/58500 would be the range breakout level. Above the same breakout formation is likely to continue up to 17500-17525/58700-58800. On the flip side, trading below 17350/58200 could possibly trigger intraday correction up to 17300-17275/58000-57900.
Technical stocks to buy
Buy, CMP: Rs 1,036.6, TARGET: Rs 1,090, SL: Rs 1,010
For the past few trading sessions, the stock was trading in a rectangle formation, finally, post the strong breakout with huge volume in the counter a strong base has been formed for the new leg of an uptrend from current levels.
Motherson Sumi Systems
Buy, CMP: Rs 221.95, TARGET: Rs 235, SL: Rs 216
The stock is into a gradual up move with a higher low series formation moreover on the intraday chart the counter has formed an Inverse Head and Shoulder chart pattern which hints at a strong uptrend momentum in the near term.
Buy, CMP: Rs 2,462.95, TARGET: Rs 2,590, SL: Rs 2,410
The stock is comfortably trading above the upper range of the parabolic SAR indicator which indicates a strong trending up move in the stock to persist. Moreover, the structure of the stock has a bullish continuation formation with a higher bottom series on the daily chart which specifies bullishness to continue over a period of time.
For the past few trading sessions, the stock had witnessed a gradual up move however the counter is trading in a range with decent volume activity and breakout from the range is very likely as the formation suggests that the stock is into the accumulation stage hence fresh breakout move is expected for a new leg of uptrend in the near term.
(Shrikant Chouhan is Executive Vice President, Equity Technical Research at Kotak Securities. Views expressed are the author’s own.)