Benchmark index Nifty50 continued to rise for the second day in a row gaining 3 per cent in two sessions. However, following the sharp up move of 500 points in just two trading sessions, the index has reached an overbought territory on a shorter time frame chart, suggesting that a temporary pause or correction could be witnessed in the coming sessions.
Therefore, a move below 16,200 could trigger profit booking, dragging the index lower to levels of 16,150-16,070. However, a sustained trade beyond 16,200 will extend the ongoing uptrend to levels of 16,450-16,600. Overall, the breakout from the month-long consolidation will have more room on the upside till levels of 16,600 as is supported by the technical indicator RSI, which has turned upwards from the 60 level.
Equity recommendation
: BUY
- CMP: Rs 15,456
- Target: Rs 16,200
- Stop loss: Rs 15,000
The stock has resumed uptrend after breaking out of a consolidation pattern resistance on good volumes. Technical indicator RSI turning upwards from the 40-level suggests extended upside in the stock.
: BUY
- CMP: Rs 721
- Target: Rs 760
- Stop loss: Rs 700
The stock turned upwards after taking support at the previous cluster of lows. Further, it has also broken out from a narrow consolidation phase, suggesting bullishness.
(Aditya Agarwala is Senior Technical Analyst, YES Securities. Views are his own.)
