The Nify50 Index finally managed to scale past the psychological level of 18,000 and closed with gains of 170 points at a new high of 18,160. Further, it is now within kissing distance of the next key resistance which is between 18,200-18,250. If bulls continue to push the Index higher beyond this resistance of 18,250 level, the uptrend could stretch to levels of 18,350-18,400 as well.
On the flip side, a failure to breakout and sustain beyond this resistance area may trigger profit booking dragging the Index lower to levels of 18,000-17,900. Moreover, on the daily time frame chart, the RSI indicator is still showing signs of a continuation of an uptrend; however, a negative divergence on lower time frame suggests that the incremental rise from here on may be choppy or witness minor corrections. Therefore, traders should remain cautious from hereon.
Equity recommendations
| Buy at CMP of Rs 1,184
Target: Rs 1,250
Stop Loss: Rs 1,140
The stock is on the verge of a breakout from an Ascending Triangle pattern consolidation suggesting bullishness building up. Technical indicator RSI has turned upwards beyond 60 after forming a positive reversal suggesting strength in the stock.
| Buy at CMP of Rs 317
Target: Rs 370
Stop Loss: Rs 290
The stock has broken out a sideways consolidation on good volumes triggering resumption of the uptrend. Further, RSI has also turned upwards after taking support at the 60 level after formation of a positive reversal pattern suggesting strength.
(The author, Aditya Agarwala, is a Senior Technical Analyst, YES Securities. The views are his own.)
