The benchmark indices witnessed profit booking at higher levels, Nifty ended 34 points higher while the Sensex was up by 18 points. Among sectors, the metal index continued to be outperformed, rallied over 2.5 percent whereas selective IT stocks registered profit booking at higher levels. On Tuesday, after a gap up opening, the market took the resistance near 18,420 and in the second half, due to intraday profit booking, it corrected sharply. However, the short term formation is still on the bullish side.
Technically, on daily charts, the index has formed a Hammer candlestick reversal formation, which indicates strong possibility of temporary weakness. We are of the view that, the short term market texture is non directional and level based trading would be the ideal strategy for the day traders.
For the traders now, 18,300 would act as a sacrosanct support zone. Above which, the positive sentiment is likely to continue. Above which, the index could move up till 18,450-18,500. On the flip side, below 18,300, the selling pressure is likely to accelerate. Below the same, NSE Nifty 50 could slip till 18,200-18,175.
Stocks to buy
BUY | CMP: Rs 473.95 | TARGET: Rs 500 | SL: Rs 464
On the daily chart, post reversal from its support zone, Jubilant FoodWorks is in a gradual up move and is into a rising channel pattern. The texture of the chart pattern suggests upward movement from the current level is very likely to continue in the coming horizon.
BUY | CMP: Rs 1091.4 | TARGET: Rs 1150 | SL: Rs 1070
Tech Mahindra is trading in a rising channel pattern forming the higher lows series continuously. The strong bullish activity on the daily chart suggests that the counter is likely to maintain bullish continuation formation in the near term.
BUY | CMP: Rs 1166.45 | TARGET: Rs 1225 | SL: Rs 1140
After hitting the recent highs of 1,200, due to the supply pressure the counter plunged on the downside. However, SBI Life has found support near its demand zone. Additionally, the formation of a bullish engulfing candlestick pattern with rising volume suggests a strong up move in the counter.
Max Financial Services
BUY | CMP: Rs 675 | TARGET: Rs 705 | SL: Rs 657
In this month so far, the stock rallied over 5 percent. Currently, Max Financial Services is holding higher bottom formation and comfortably trading above 20 and 50 day SMA which is largely positive. For the positional traders now, 657 would be the key level to watch if stock manages to trade above the same then we can expect an uptrend continuation wave up to 690-705.
(Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities. Views expressed are author’s own. Please consult your financial advisor before investing.)