Following the massive correction on Friday last week, the headline index is trading steady in the first two sessions of the current week. Further, the Nifty50 index ended trade with gains of 1.07% as bulls stepped in towards the end of the trading session to take the index to the high point of the day.
However, going ahead, 20-DMA placed at 14,995 will act as a stiff resistance to break on the upside. Failure to sustain beyond the 20-DMA resistance, i.e., 14,995-15,000 may resume the choppy and corrective sessions, dragging the index lower to levels of 14,800-14,650. On the flipside, if bulls manage to take the index beyond 15,000 levels, the up move will extend to levels of 15,100-15,200.
Equity recommendation
Asian Paints: BUY
CMP: Rs 2,390
Target: Rs 2,550
Stop loss: Rs 2,300
The stock has broken out from a channel upper end resistance placed at Rs 2,390. Further, the stock has completed its corrective wave and has now turned upwards, suggesting resumption of the bull trend. RSI has also turned upwards from the oversold zone after forming a positive divergence.
L&T Technology Services: BUY
CMP: Rs 2,729
Target: Rs 2,950
Stop loss: Rs 2,600
The stock is on the verge of a breakout from an ascending triangle pattern resistance at Rs 2,780. A successful breakout from this pattern on good volumes will extend the gains to levels of Rs 2,950. Further, volumes have picked up in the bull candles in the run up to the breakout, suggesting bullishness. Moreover, the RSI has also turned upwards after forming a positive reversal confirming bullishness.
Aditya Agarwala is
Senior Technical Analyst, YES Securities. Views are his own.
