Following a two-day uptrend, Nifty50 witnessed gap-up opening on Friday and rallied up to 17,793; however, it failed to cling on to higher levels and erased early gains. Eventually, Nifty ended in negative territory below the 17600 mark. The appearance of a bearish candle with a higher shadow indicates profit-taking at higher levels. Also, Nifty’s breadth turned mildly negative with 34 out of Nifty50 components settling in red. Negative follow-up action could mean an immediate hurdle near 17800, whereas on the flip side Nifty might revisit levels of 17500-17450 to digest recent gains.
Bank Nifty surpassed levels of 38000 post Thursday’s swift up-move; however, after marking a high at 38113, the index pared intraday gains to register a low at 37396. Sustenance above 37200-37000 is required to keep near-term outlook positive for Nifty Bank.
The metal index retreated as it failed to surpass the prior month’s peak. Negative follow-up action could attract under-performance from a near-term perspective.
Recommendations
Sell
September futures near Rs 560-558
Stop loss at Rs 575
Target at Rs 530
After a multi-month decline, recoveries remained short-lived as the stock failed to build the required momentum on the upside. Sustenance below Rs 570 could keep the near-term outlook negative.
Buy
near Rs 665-660
Stop loss at Rs 638
Target at Rs 720
After losing 20% from the prior month’s peak, the stock found renewed buying interest near the support zone. Recovery in the recent past with sustenance above Rs 640 zone could mean resumption of the uptrend.
(Amit Trivedi, CMT, Technical Analyst – Institutional Equities, YES Securities)
