Bulls finally managed to take the Nifty50 index beyond the key hurdle of 15,950-16,000 levels following several previously failed attempts. Benchmark index Nifty50 ended trade with massive gains of 250 points, closing above the 16,100 level. However, following this surge, the index has reached an overbought zone on a shorter time frame chart, suggesting a temporary pause in the coming sessions before it resumes an uptrend.
On the downside, any throwback may find support at 16,000-15,950 levels and a sustained trade beyond 15,950 will take the index higher to levels of 16,230-16,300. On the flipside, a move below 15,950-15,900 could drag it lower to levels of 15,800. Moreover, the index has broken out of a month-long consolidation phase, which clearly indicates resumption of the uptrend.
Equity recommendation
Cummins India: BUY
- CMP: Rs 909
- Target: Rs 985
- Stop loss: Rs 865
The stock has resumed the uptrend after breaking out of a Triangle pattern resistance on good volumes. Technical indicator RSI turning upwards beyond the 60-level suggests extended upside in the stock.
Ashok Leyland: BUY
- CMP: Rs 141
- Target: Rs 155
- Stop loss: Rs 133
The stock has broken out of an Ascending Triangle pattern neckline on good volumes, triggering resumption of the uptrend. Further, the RSI has also turned upwards, making higher highs and higher lows, confirming bullishness.
(Aditya Agarwala is Senior Technical Analyst, YES Securities. Views are his own.)
