The benchmark index Nifty50 reversed to end in the green on Tuesday with gains of 165 points following two sessions of profit booking and a soft opening as bulls defended the 17,300 support zone. However, on the upside, it will face resistance at the 17,600-17,630 zone and failure to break out beyond this hurdle can trigger profit booking, dragging the Index lower to 17,450-17,350 levels.
On the flip side, a sustained trade above 17,630 can extend the gains to 17,700-17,800 levels. Further, technical indicator RSI has turned upwards after forming a positive divergence on a shorter time frame chart, indicating a possible test at 17,630 in the coming session.
Moreover, traders should be cautious as markets will remain choppy and volatile and bouts of profit booking cannot be ruled out as India VIX has witnessed a range shift above the 16-level.
Equity recommendation
MCX
Buy at CMP of Rs 1,637
Target: Rs 1,730
Stop Loss: Rs 1,590
The stock has resumed an uptrend after breaking out of a narrow consolidation phase on good volumes. Technical indicator RSI has turned upwards after taking support at the 50 level, suggesting strength in the stock.
ICICI Lombard General Insurance
Buy at CMP of Rs 1,638
Target: Rs 1,720
Stop Loss: Rs 1,600
The stock is on the verge of a breakout from a narrow consolidation phase. Further, strong volume build up in the runup before consolidation phase suggests that the breakout should follow. Technical indicator RSI turning upwards from the 60-level is suggesting a breakout is on cards.
(The author is Aditya Agarwala, Senior Technical Analyst, YES Securities. The views are his own.)
