Day trading guide for Friday

Today, on the big support of the 50-day SMA, the market has established a long-led doji, indicating that the market has taken a break after falling below the high of 14,750/50,185. Based on this, the market may either continue the rally going southward or it may turn back. In short, the market would return to trending mode in the next day or two.



On the upside, 13,930/47,000 would be a big hurdle and support would be at the 13,680/46,500 level. If the Nifty/Sensex closes above or below the given level, it would move up to 400 to 500 points on either side. Traders need to be level-based and investors would have the opportunity to invest in strong companies with a medium-term outlook (1 to 3 weeks).

Tech Picks
Shrikant Chouhan, Executive Vice President – Technical Research

Dr Reddy: BUY

• CMP: Rs 4,871.8
• Target: Rs 5,020
• Stop loss: Rs 4,790
• The formation of hammer candlestick patterns near the support zone suggest up move to pick up.

Axis Bank: BUY

• CMP: Rs 670.7
• Target: Rs 690
• Stop loss: Rs 660
• Strong bullish engulfing candlestick formation near 50-day SMA with excellent volume activity.

Bharti Airtel: BUY

• CMP: Rs 570.9
• Target: Rs 590
• Stop loss: Rs 560
• The stock is holding its retracement zone with a decent buying activity in an intense selloff in the broader market.

Titan: BUY

• CMP: Rs 1,450.1
• Target: Rs 1,495
• Stop loss: Rs 1,425
• Bullish reversal candlestick formation near important retracement zone on daily chart.

F&O Strategy
Analyst: Sahaj Agrawal, DVP-Derivatives, Research

Futures:

Buy Maruti Futures Feb at Rs 7,600

• SL: Rs 7,400
• Target: Rs 8,000

The stock is trading near its support trendline placed at Rs 7,500 on spot.

Options:

Nifty Bull Call Spread:
Buy 25 Feb 14,000 CE at 280 and Sell 25 Feb 14,500 CE at 115

• Premium Outflow:
• Max Loss: 165
• Strategy Target: 350/400

The last few trading sessions have seen Nifty plunging more than 1,000 points after making an all-time high of 14,753 on 21 Jan. The current phase would qualify as a part of an impending correction, the extent of which is difficult to ascertain at the moment. However, the main uptrend shall again be expected to resume above the resistance level of 13,900. Long positions may be created (conditional) in case Nifty breaks above 13,900 for a target of 14,400-14,500. Given the Budget event next week, limited risk options strategies, like a bull call spread would be apt.

Forex & Interest Rate Technical
Analyst: Anindya Banerjee, DVP, Currency Derivatives & Interest Rate Derivatives

USD-INR: Sell between 73.60/80

• Target: 72.75/72.50
• Stop loss: 74.05

Commodity Calls
Analyst: Ravindra Rao, VP- Head Commodity Research