Nifty50 ended another session in the red, down 66 points, as the bulls failed to push the benchmark index beyond the immediate hurdle of 15,835. However, it did manage to take support at the trendline joining recent lows placed at 15,720, which also happened to be the 78.6 per cent Fibonacci retracement level. Technical indicator RSI also formed a positive reversal, indicating bullishness intact at the moment. A sustained trade above the support level of 15,720 can trigger short covering rallies, taking the index to levels of 15,835-15,900. On the flipside, a breakdown from key support at 15,720-15,700 could extend the profit booking and drag Nifty50 to levels of 15,670-15,600.
Equity recommendations
- Buy Dr Reddy’s @ CMP of Rs 5,433 for a target of Rs 5,700 with a stop loss at Rs 5,290
The stock is on the verge of a breakout from a trendline resistance placed at Rs 5,495. A successful breakout on healthy volumes will extend the bounce Rs 5,700. RSI has also turned upwards from the key level of 60, confirming bullishness. Further, it took support at the cluster of its key short-term moving averages, which is a sign of bullishness.
- Buy Naukri (Info Edge) at CMP of Rs 4,953 for a target of Rs 5,245 with a stop loss at Rs 4,800
The stock is on the verge of a breakout from a cup and handle pattern, suggesting bullishness. Further, volumes have been good in the recent bull candles, confirming an uptrend. Technical indicators are also in bull territory, confirming strength.
(Aditya Agarwala is Senior Technical Analyst at YES Securities)
