Nifty traded within a narrow trading band of 86 points ahead of the US Fed meet outcome. Post Tuesday’s recovery, Nifty swung between negative and positive territory in today’s trade, thereby lacking directional moves on either side. Price volatility is likely to inch higher and sustenance below 17,800 could mean that index is due for mean reversion and mild consolidation/pullback is possible.
Meanwhile, unlike Nifty, Bank Nifty traded beneath its prior session’s high. Sustenance above 37,000 is crucial for gaining some positive traction as failure to do so could mean a continuation of its underperformance against the benchmark index.
Infrastructure index and Energy index rallied for the second consecutive session. Sustenance at current levels could unlock further upside potential; specific stock rallies within this space are likely to continue and hence pullbacks should be considered as buying opportunities.
Recommendations
Buy
at Rs 427-424
Stop loss: Rs 404
Target: Rs 470
Bulls have regained momentum on the upside, forming a sizable bullish candle. As the stock closed above its 50-day average, sustenance at current levels could mean a shift of band on upside and a possible short term rally towards the Rs 465 zone.
Sell
September Futures at Rs 727-730
Stop loss: Rs 751
Target: Rs 680
During the recent decline, the stock has broken its support levels. Levels of 740 could act as an immediate hurdle, while negative follow-up action is likely to drag the stock till the Rs 680 zone.
(The author is Amit Trivedi, CMT, Technical Analyst – Institutional Equities, Yes Securities. The views are his own)
