Nifty50 closed 143 points higher and saw a short-covering rally on Tuesday, ahead of the October expiry. Bulls protected the 20-DMA placed at 17,980 and the psychological level of 18,000 for the second day, which is going to act as a key support area in the coming trading sessions. Moreover, a sustained trade beyond 18,310 will extend the gains taking the index higher to 18,450-18,530 levels.
On the flip side, failure to trade beyond 18,310 may resume the choppy sessions dragging the Nifty50 lower to 18,090-18,000 levels. RSI has again turned upwards from the 60-level, confirming that bulls still have an upper hand as Nifty50 continues to make higher-high and higher-low and 20-DMA acting as a trailing stop loss.
Equity recommendation
Jindal Steel & Power
Buy at CMP Rs 446
Target: Rs 485
Stop Loss: Rs 415
The stock has resumed the uptrend after testing the neckline of an Ascending Triangle pattern. A sustained trade above Rs 450 on higher volumes will take the stock higher to levels of Rs 485. Further, RSI indicator is also confirming the bullishness.
Buy at CMP Rs 508
Target: Rs 546
Stop Loss: Rs 484
The stock is on the verge of a breakout from a sideways consolidation phase suggesting bullishness building up here. Further, RSI has turned higher from the previous reversal zone of 65 confirming the bullishness.
(The author, Aditya Agarwala is Senior Technical Analyst at YES Securities. Views are his own.)
