Post three weeks’ decline, the Nifty opened this week on a positive note above 14,400 zone. However, after marking day’s high at 14,557 during early trade, the Nifty traded beneath those levels throughout the session. Eventually forming an indecisive candle, Nifty ended at 14485, up 144 points. However, inability to provide a close above prior week’s high (i.e. 14,527) indicates that Nifty lacked required momentum on the upside. Levels of 14,200 are likely to act as important support levels from a near-term perspective, while sustenance above 14,500 is essential to gain required momentum on the upside.
Bank Nifty jumped ~2%; continuing its Friday’s outperformance, it formed a Doji candle. Hence, sustenance below 32,500 could attract some consolidation. Within the banking space, PSU Bank index recovered for the consecutive third session. Positive follow through could continue ongoing revival of public banking space.
Bulls’ regained momentum in the metal and cement space, while mild profit taking was visible in the pharma space.
Recommendations
Buy SBI near Rs 342
Stop loss: Rs 330
Target: Rs 366
After losing ~25% from the Feb peak, the stock has defended its 100 days moving average. Mild reversal in the previous week and positive follow through in today’s trade could mean possible bounce towards Rs 366 zone.
Buy near Rs 245
Stop loss: Rs 235
Target: Rs 265
The stock went through a sharp decline of ~30% from the March peak. However, the appearance of multiple low near Rs 232 and swift reversal thereafter could mean that the stock is due for mean reversion from a near-term perspective.
Amit Trivedi is CMT, Technical Analyst – Institutional Equities, YES Securities. Views are his own.
