Benchmark index Nifty50 shut shop marginally in the green, led by profit booking in late trade after briefly testing recent clusters of highs in the opening trade. Further, bulls failed yet again to take the index beyond the recent highs, i.e. 17,430, suggesting weakening uptrend and a stiff resistance zone. Therefore, the index remains locked in a narrow trading range between 17,430 on the upside and 17,250 on the downside.
Going ahead, immediate support on the downside is at 17,350 and a breach of this support may lead to profit booking, dragging the index lower to levels of 17,250, which is the lower end of the range. On the flipside, if the index sustains beyond the upper end of the range, i.e. 17,430, a fresh up move may take the index higher to levels of 17,490-17,550. Moreover, RSI remains at an overbought territory on the daily time frame. Therefore, bouts of profit booking at intervals cannot be ruled out.
Equity recommendation
Hindustan Petroleum: BUY
CMP: Rs 274
Target: Rs 286
Stop loss: Rs 268
The stock has resumed the uptrend after breaking out of a narrow consolidation phase on good volumes and is also on the verge of a breakout from the neckline of an inverted Head & Shoulders pattern. Technical indicator RSI has turned upwards, suggesting strength in the stock.
: BUY
CMP: Rs 780
Target: Rs 820
Stop loss: Rs 760
The stock is on the verge of a breakout from a narrow consolidation phase following its recent corrective move. Further, strong volume build up in the run up before consolidation phase suggests that the breakout should follow. Technical indicator RSI turning upwards from the 40 level is suggesting that a breakout is on the cards.
(Aditya Agarwala is Senior Technical Analyst, YES Securities . Views are his own.)
