Indian benchmark indices continue to remain volatile and traded weak despite a steady up move in the global equity markets as rising Covid-19 cases in India kept traders jittery. Further, bulls haven’t been able to keep the Nifty50 index above its 20-DMA placed at 15,050, acting as an intermediate resistance.
Moreover, the index is locked in a trading range of 300 points with crucial support at the 50-DMA, which is currently placed at 14,700. All recent corrections have halted at the 50-DMA making it a critical support line, a break of which may trigger deeper corrections dragging the Nifty50 lower to levels of 14,460-14,340 being the GAP area.
RSI is also suggesting that the upward momentum is losing steam as it has been constantly turning downwards from the 60-level being the upper end of the bear territory.
Broader markets, however, remained buoyant and outperformed the benchmark Indices as stock-specific buying continued to attract the market participants.
Equity recommendation
Cyient: BUY
CMP: Rs 702
Target: Rs 750
Stop loss: Rs 670
The stock has resumed its uptrend after breaking out of a consolidation Triangle pattern. Further, volumes have picked up in the recent bull candles and also in the breakout candle, confirming the bullishness. Technical indicator RSI is also confirming that the stock is trading in the bullish territory.
Uflex: BUY
CMP: Rs 437
Target: Rs 500
Stop loss: Rs 405
The stock has broken out from a trendline resistance on good volumes, triggering resumption of the uptrend. Further, the RSI has turned upwards after forming a positive reversal, confirming bull trend dominant at the moment. Other technical indicator +DI crossing over -DI affirms strength in the stock.
Aditya Agarwala is Senior Technical Analyst, YES Securities. Views are his own.
