After witnessing a huge volatility in the previous week, the Nifty commenced this week on a negative note. Erasing Friday’s partial gains, the Nifty failed to surpass 14,800. On the downside, it made a day’s low below 14,600 mark, eventually forming an inside bar and Doji chart pattern.
Nifty largely swung between the levels of 14,600-14,750. It also took the form of NR4 (i.e. narrowest high/low range when compared with prior three sessions’ daily range). Post 6.4% decline from the recent high, mild consolidation/recovery in the Nifty is possible. However, levels of 14,950 will continue to act as hurdle zones. Ideal strategy would be to maintain focus on stocks/sector-specific action.
FMCG index witnessed a consolidation breakout in the previous week. Positive follow-up thereafter unlocks further potential on the upside.
Meanwhile, the Bank Nifty underperformed in today’s trade. Sustenance above 33,300 is essential for any revival to set in.
Recommendations
Buy (India) near Rs 1,570-1,575
Stop loss: Rs 1,530
Target: Rs 1,650
The recent decline found support near its six-month support levels. Swift recovery thereafter could mean that stock is in a mature stage and positive follow-up action could resume prevailing the uptrend.
Buy near Rs 225-224
Stop loss: Rs 214
Target: Rs 245
Post ~16% decline from the Feb peak, bulls regained momentum on the upside. Sustenance above Rs 220 could lift the stock till the Rs 245 zone.
Amit Trivedi, CMT, Technical Analyst – Institutional Equities, YES Securities. Views are his own.
