The Nifty50 index marginally in the red on Tuesday after failing to a breakout of the key resistance hurdle at 15,780, which is the 127 per cent Fibonacci extension level of the previous corrective wave. The index has been continuously forming a hanging man candlestick pattern following the current prolonged upmove at the key resistance of 15,780-15,800, which suggests that the uptrend is losing momentum and a failure to break out of this resistance in the coming sessions may lead to corrections.
On the downside, immediate support is placed at 15,670. A move below this support level could trigger corrections to 15,600-15,550 levels. However, a successful breakout from the resistance zone of 15,780-15,800 would extend the uptrend, taking the index higher to levels of 15,870. RSI has also turned southwards from the cluster of previous resistance peaks, suggesting a weakening uptrend.
Stock recommendations
- Buy Route Mobile @ CMP of Rs 1,808 for a target of Rs 2,000 with a stop loss at Rs 1,700
The stock has resumed its upward journey after breaking out of a bullish flag pattern on good volumes. Further, a sustained trade beyond Rs 1,800 will take it to levels of Rs 2,000 in the coming sessions. RSI has also turned upwards from the 60 level, confirming strength in the stock.
- Buy @ CMP of Rs 1,772 for a target of Rs 1,920 with a stop loss at Rs 1,700
The stock has resumed its uptrend after breaking out of a narrow consolidation phase on good volumes, suggesting bullishness. Technical indicators are also in bull territory, confirming strength in the stock.
(Aditya Agarwala is Senior Technical Analyst at YES Securities)
