Benchmark indices snapped three days of gains to shut shop in the red, down by 1%. Further, it failed to sustain beyond the 78.6% Fibonacci retracement level placed at 15,225 and the intermediate support at 15,175 leading to deeper corrections in the second half of the trading session. On the downside, immediate support is at the 20-DMA, placed at 15,000 levels below which the selling pressure will intensify, dragging the index lower to levels of 14,870-14,775.
RSI on a shorter time frame has turned downwards after forming a negative divergence, suggesting sustained choppy trading sessions in the coming week. On the flip side, if bulls manage to take the index beyond the resistance cluster of 15,175-15,225, fresh up move will resume taking the index to levels of 15,350-15,400.
Equity recommendation
UPL: BUY
CMP: Rs 615
Target: Rs 670
Stop loss: Rs 585
The stock has broken out from a trendline resistance placed at Rs 600, resuming the uptrend. Further, on a higher time frame, it has broken out the neckline of an inverted Head & Shoulders, suggesting a strong bull trend. RSI has also turned upwards from the oversold zone after forming a positive divergence.
Asian Paints: BUY
CMP: Rs 2,417
Target: Rs 2,560
Stop loss: Rs 2,340
The stock is on the verge of a breakout from a consolidation pattern resistance at Rs 2,450. A successful breakout from this consolidation on good volumes will extend the gains to levels of Rs 2,560. Further, volumes have picked up in the bull candles in the run up to breakout, suggesting bullishness. Moreover, the RSI has also turned upwards after forming a positive reversal, confirming bullishness.
Aditya Agarwala is Senior Technical Analyst, YES Securities. Views are his own.
