After a mild recovery last week, Nifty commenced Monday’s session on a gap-up note to hit the 18,000 mark. However, the index soon erased early gains as it entered the negative territory and made the day’s low at 17,836. Again it recovered and registered day’s high of 18,088 before settling at 18,069, up 152 points. Nifty revisited its 20-day average levels which were broken in the recent past. The mid-point of the prior month’s decline stands near 18,100, hence, follow up action needs to be closely watched out. A sustenance below 18,100 could attract consolidation between 17,800-18,100 zone.
Meanwhile, Bank Nifty continued to underperform the benchmark index. It fell till 38,932 before settling at 39,438, down 135 points. Flat internal breadth indicates that the mixed activity within the banking space is likely to continue.
After losing 10 per cent from record peak, the FMCG index is holding ground. Positive follow-up action is likely to attract stock-specific rally within this space.
Recommendations
Buy LIC Housing Finance near Rs 430
Stop loss: Rs 417
Target: Rs 457
After a few days of consolidation, the market bulls regained momentum on the upside. A positive follow-up is expected to unlock upside potential.
Buy Wipro 640 strike November put near 8.5
Stop loss: 4
Target: 20
Recovery is likely to face resistance near Rs 670, while the inability to hold current levels could drag the stock further lower till Rs 620-610 zone.
Disclaimer: Amit Trivedi, CMT, Technical Analyst – Institutional Equities at YES SECURITIES.
