The market has formed an Inside Body candlestick on the daily chart that is an indication of bullish continuation, especially if the market breadth is exceptionally strong. For every stock closing lower in the market on Thursday, there were three stocks that finished on a positive note, while all sectors closed in positive territory. This is in stark contrast to the previous day. On Thursday, the market closed at 15,738/52,300, which is above the previous day’s average levels. Also, there was support from financial stocks that have the potential to take the market to levels of 16,000/53,000.
Besides, big support will be at 15,600/51,900 and 15,550/51,750 levels. Nifty Bank and Nifty Financial Services, led by SBI, ICICI Bank and Bajaj twins, closed at the highest level of the day. The strategy should be to buy Nifty for a target of 16,000/16,050 (53,000/53,100) with a final stop loss at 15,550/51,750.
Tech stock picks
- Buy Dr Reddy’s at CMP of Rs 5,292.05 for a target of Rs 5,450 with a stop loss at Rs 5,210
The stock is trading in a triangle chart pattern. The formation of the strong Marubozu candlestick
hints at a rising trend in the near term.
- Buy JSW Steel at CMP of Rs 705.8 for a target of Rs 725 with a stop loss at Rs 695
An Inverted Hammer candlestick pattern is formed near the short-term trend line which is acting as a
support for the counter.
- Buy at CMP of Rs 1,438.95 for a target of Rs 1,480 with a stop loss at Rs 1,415
On the daily chart, the stock has formed a Cup and handle chart pattern and breakout from the
resistance area is evident for further up move.
- Buy SBI at CMP of Rs 432.25 for a target of Rs 445 with stop loss at Rs 425
The stock is into a strong uptrend as it constantly finds support near the short-term moving averages
resulting in the bullish continuation chart formation.
(Shrikant Chouhan is Executive Vice President-Technical Research at Kotak Securities)
By Sahaj Agrawal
F&O Strategy
- Buy Cummins June futures at Rs 838 for a target of Rs 880 with a stop loss at Rs 810
A falling channel breakout is seen on the daily charts above Rs 835 (spot).
Options
Nifty bull-call spread for 24-June 2021 series: Buy 15,800 CE at 140 and sell 16,100 CE at 40
Premium Outflow: 100
Target: 250
Stop loss: 40
Short-term view: Nifty50 has been consolidating for the past four trading sessions near the 15,750 mark with immediate support placed at 15,500. The market breadth is also quite strong and we expect the uptrend to continue towards 16,000. In this situation, a bull call spread of 15,800-16,100 is apt.
(Sahaj Agrawal is Head of Research-Derivatives Futures at Kotak Securities)
By Anindya Banerjee
Forex & interest rate technical
USD-INR
Buy June futures between 72.60 and 80 for a target of 73.50/80 with stop loss at 72.40
(Anindya Banerjee is DVP-Currency Derivatives & Interest Rate Derivatives at Kotak Securities)
By Ravindra Rao
Commodity Calls
ET CONTRIBUTORS(Ravindra Rao, CMT, EPAT, is VP- Head Commodity Research at Kotak Securities)
