Indian benchmark index Nifty50 ended a narrow rangebound day of trade marginally higher and moved beyond the key hurdle of 15,800 in a volatile trading session the previous day. Moreover, the index formed a Doji Star pattern at the upper end of a rising channel, which indicates indecision in the minds of the market participants.
Further, a trade below 15,800 which now will act as an immediate support, may trigger profit booking, dragging the index lower to levels of 15,745-15,670 (being lower end of the channel). However, a trade beyond the upper end of the channel, i.e, 15,900 would extend the uptrend, taking the index higher to levels of 15,977-16,000.
Technical Indicator, RSI on a shorter time frame chart has started forming negative divergences, suggesting weakening upward momentum. Therefore, traders should be cautious trading the index in the coming sessions.
Equity recommendations
Just Dial: BUY
CMP: Rs 1,009
Target: Rs 1,100
Stop loss: Rs 960
The stock is on the verge of a breakout from a trendline resistance placed at Rs 1020. A sustained trade beyond this hurdle on good volumes will extend the uptrend to levels of Rs 1,100. Further, volumes were good leading up to the breakout, suggesting bullishness. RSI has also turned upwards from the 58 level, confirming strength dominant in the stock .
Ashiana Housing: BUY
CMP: Rs 142
Target: Rs 160
Stop loss: Rs 132
The stock has resumed its uptrend after taking support at the 20-DMA support line placed at Rs 131. Further, it has broken out from a channel resistance on good volumes, confirming bullishness. Technical indicators are also in the bull territory, confirming strength in the stock.
Aditya Agarwala is
Senior Technical Analyst, YES Securities. Views are his own.
