A sustained trade above the high of the Doji i.e. 17,160 & 17,200, which was the previous cluster of lows, can trigger a short-covering rally to levels of 17,350-17,500. However, failure to trade beyond this cluster of resistances would resume the volatile session of trade, dragging the index lower to levels of 16,900-16,700.
Moreover, RSI on a shorter time frame has turned upwards after forming a positive divergence and the formation of a bullish candlestick pattern to indicate a short-covering rally could be witnessed in the coming sessions.
Stock recommendations
Godrej Consumer
BUY: CMP Rs 913
Target: Rs 970
Stop Loss: Rs 880
The stock is on the verge of a breakout from a falling wedge pattern, suggesting bullishness is building up in the counter. Further, RSI has also turned north after forming a positive divergence suggesting higher levels in the coming sessions.
Kotak Bank
BUY: Rs 2,020
Target: Rs 2,200
Stop Loss: Rs 1,935
The stock has broken out of a consolidation phase on good volumes after forming a double bottom at Rs 1,935 levels, suggesting bullishness. Further, RSI has also turned upwards after making a positive reversal.
(The author is Senior Technical Analyst, YES SECURITIES. Views expressed are personal.)
