After retracing more than 50 per cent of the recent decline, Nifty failed to sustain above 18,300 in Wednesday’ trade. Nifty50 formed the NR7 chart pattern i.e. the lowest daily range when compared with the prior six sessions’ range. Inability to provide positive follow-up action to Tuesday’s bullish candle is likely to attract rangebound move within the 18,100-18,350 levels. Due to the expiry of the October derivative series on Thursday, price volatility is likely to remain high compared with today’s session. Sector-specific action is likely to continue.
Meanwhile, trading beneath its prior session’s high, Bank Nifty formed a bearish candle. The appearance of this pattern could attract some consolidation or pullback towards 40,600 to digest recent swift gains.
Intraday rally in the Energy index remained short-lived, with Monday’s high acting as a hurdle zone. Negative follow-up action is likely to attract some price correction.
Recommendations
Marico: Buy near Rs 570
Stop loss: Rs 556
Target: Rs 600
After losing ~10 per cent from the recent high, the bulls have regained momentum on the upside. Follow-up buying can lift the stock towards Rs 600 zone.
Adani Ports Nov Future: Sell near Rs 750
Stop loss: Rs 765
Target: Rs 720
Series of descending tops and bottoms remain intact while the intraday rally remains short-lived. Any negative follow-up through could extend the recent decline.
(The author, Amit Trivedi, is CMT, Technical Analyst – Institutional Equities, YES Securities.)
