Bank Nifty opened positive and traded above 36,000 through most of the session. However on a weekly basis, Bank Nifty underperformed the benchmark index. Sustenance above 36,000 is important to attract upside momentum.
Gaining for the straight fifth week, IT index rallied 4.5% this week. Positive internal breadth indicates more room on the upside for IT stocks.
Bulls’ took a pause in the broader indices this week, major move on either side is unlikely from a near-term perspective.
FMCG index is bouncing off its support zone, positive follow-up action could attract stocks specific rally.
From data perspective, selected capital goods stocks saw fresh longs this week, while few Metal stocks witnessed mild short build up. Most of pharma stocks remained weak throughout the week, selected pharma stocks witnessed decent jump in open interest, suggesting on-going corrective decline to continue and major upside unlikely.
Recommendations
Buy near Rs 223-225
Stop loss: Rs 216
Target: Rs 245
After losing ~14% from June month’s peak, the stock swiftly recovered off the support zone. Appearance of large bullish candle ensures immediate floor near 220 and sustenance above for the same could lift the stock towards 245.
Buy near Rs 350-347
Stop loss: Rs 338
Target: Rs 375
With sustained move above important averages, the stock is hovering near its all time higher zone. Appearance of a bullish candle on the weekly chart could unlock further upside potential.
(Amit Trivedi, CMT, Technical Analyst – Institutional Equities, YES Securities
. The views are his own).
