After Tuesday’s throwback from the 15,900 zone, markets remained choppy in today’s trade. Nifty opened on a positive note. However, erasing early gains, it entered the negative territory. Forming Marubozu bearish candle pattern (i.e. identical open and high with close near day’s low), Nifty ended below the 15,700 mark.
This week’s price action so far indicates pause after up move. Monday’s low (i.e. 15,507) is likely to act as an important support zone, whereas Nifty’s consolidation at upper band is likely to continue.
Bank Nifty formed NR4 chart pattern (i.e. lowest high/low trading band as compared to prior three sessions range). Sustenance above 34,500 is essential to gain some momentum on the upside.
Auto index rallied for the consecutive session; sustenance could trigger stock-specific rally in the auto space.
Rally in the metal stocks remained short lived. Metal index has underperformed the most in today’s trade.
IT index retreated lower as it failed to surpass prior week’s high. Mild consolidation is possible.
Recommendations
Buy Ramco Cement near Rs 1,010-1,015
Stop loss: Rs 985
Target: Rs 1,090
After witnessing a positive breakout through the recent consolidation, the stock revisited the breakout zone and since then is holding support of Rs 1,000. Positive follow up action could attract positive momentum, lifting stock towards the Rs 1,100 zone.
Buy Mahindra CIE near Rs 230
Stop loss: Rs 220
Target: Rs 250
After losing 10% from the recent high, the stock has regained momentum on the upside. Sustained move above important averages is likely to keep near-term structure positive.
Amit Trivedi is CMT, Technical Analyst – Institutional Equities, YES Securities. Views are his own.
