Indian markets are currently running on steroids as bulls drove the benchmark indices higher for the second day in a row with another 200 points addition to its tally. Nifty added 2.56 per cent or 430 points in just two trading sessions. The month of August belonged to the bulls after two months of consolidation as the index gained a massive 8.7 per cent.
However, this sharp upswing in two sessions has taken the index to extreme overbought territory on shorter time frame charts and daily charts, which suggest that bouts of profit booking may be witnessed going ahead. Next immediate hurdle now is at 17,180-17,200 levels and failure to sustain beyond this resistance zone may trigger profit booking to levels of 17,000-16,880 on the downside, with major support at 16,700 levels. However, sustained trade beyond 17,200 levels may extend the gains to levels of 17,450.
Equity recommendations
: BUY
CMP: Rs 3,200
Target: Rs 3,320
Stop loss: Rs 3,120
The stock has resumed its uptrend after breaking out of a consolidation pattern resistance on good volumes. Technical indicator RSI has turned upwards after forming a positive divergence, confirming the bullishness.
ICICI Lombard General Insurance: BUY
CMP: Rs 1,595
Target: Rs 1,660
Stop loss: Rs 1,530
The stock is on the verge of a breakout from an Ascending triangle pattern resistance line placed at Rs 1610 levels. A successful breakout on volumes will take the stock higher to levels of Rs 1660. RSI is also suggesting bullishness going forward.
(Aditya Agarwala is Senior Technical Analyst, YES Securities. Views are his own.)
