After rallying 6.6 per cent from the recent low, Nifty commenced this week on a flat note. Intraday declines were limited to 16,481. However, after marking a fresh record high of 16,589, Nifty eventually ended at 16,563 with modest gains. Mixed activity was seen on the sectoral front, but Nifty’s internal breadth turned mildly negative.
Mild throwback cannot be ruled out to digest recent gains, although since the start of the month, levels of-5 day average on closing basis is acting as the support zone. The same average levels could turn out as immediate floors (i.e. 16,400).
Bank Nifty remained beneath prior week’s peak and traded between a narrow trading band. Positive follow-up is necessary to gain some positive traction.
On the sectoral front, select energy stocks saw positive traction; stocks-specific rally within this space is possible.
Bouncing off the support zone, FMCG index registered a new record high. Meanwhile, pharma index corrected for the fifth straight session. Poor internal breadth indicates that further correction within pharma stocks is possible.
Recommendations
Buy
Tata Steel BSL near Rs 98-97
- Stop loss: Rs 93
- Target: Rs 110
Post multi-month consolidation, the stock is bouncing off its support zone and has managed to sustain above the 50-day average. Appearance of multiple bullish candles indicate that the stock could revisit levels of Rs 110.
Buy
Sun Pharma Advanced Research near Rs 298-296
- Stop loss: Rs 285
- Target: Rs 325
With sustained move above important averages, the stock has witnessed a positive break through the recent consolidation.
(Amit Trivedi is CMT, Technical Analyst – Institutional Equities, YES Securities. Views are his own.)
