Day trading guide: 14,617 may act as immediate hurdle for Nifty

Amit Trivedi, YES Securities

Snapping five sessions winning streak, the Nifty lost ~1% to settle near levels of 14,434. It erased prior four sessions’ gain and filled the upward gap at 14,367, which Nifty formed on Monday. On the weekly chart, Nifty formed a doji candle with comparatively large upper shadow. Appearance of this pattern post multi-week up move indicates profit taking at higher levels. Peak of today’s large bearish candle (i.e. 14,617) could turn out as an immediate hurdle, while negative follow-up could drag the Nifty lower till 14,300-14,250 zone.

Recent underperformance eventually pulled the Bank Nifty lower till 32,044. Sustenance below 32,500 could continue Bank Nifty’s ongoing underperformance.

India Vix rallied 4% to settle near 24. On the options front, significant open interest additions are visible at 14,500 and 14,600 call strikes for the coming weekly expiry. It represents overhead resistance near the 14,600 zone.

Equity recommendation

Buy Wockhardt between Rs 525-530

• Stop loss: Rs 495
• Target: Rs 590
• During the recent decline, bulls outstripped bears near levels of Rs 485. Swift recovery thereafter ensures resumption of prevailing uptrend.

Derivative recommendation

Sell Coforge January future between Rs 2,650-2,660

• Stop loss: Rs 2,755
• Target: Rs 2,450
• Post multi-month up move, a throwback from the record peak is visible. Today’s swift decline is likely to limit intraday recoveries.

( Amit Trivedi is CMT, Technical Analyst - Institutional Equities, YES Securities. Views are his own.)