Nifty on Monday tanked 524 points to make a low below 14350-mark. It opened a truncated week with a huge downward gap as selling pressure intensified. Eventually marking day’s low at 14249, Nifty formed a large bearish candle as 46 out of the Nifty50 components ended in the red. Peak of today’s large bearish candle could turn out as an immediate hurdle, while sustenance below 14,300 could drag the index further lower till the 14,050 zone.
Bank Nifty lost ~19% from its record peak. Throughout the previous week, Bank Nifty failed to provide close above 33000, thereby continuing its underperformance. Sustenance below 31,000 could continue further correction till 30,000-29,200 zone.
Auto index broke below its recent low. Stock-specific correction within the auto space is likely to continue.
Recommendations
Buy Bluestar near Rs 870-860
Stop loss: Rs 830
Target: Rs 930
Sustenance above important averages and support of Rs 830 could lift the stock to revisit levels of Rs 930.
Sell April future near 9,250
Stop loss: 9,500
Target: 8,750
Appearance of large bearish candles at current juncture indicates influence of resistance at play, while negative follow up action could continue recent decline.
Amit Trivedi is CMT, Technical Analyst – Institutional Equities, YES Securities. Views are his own.
