Day trading guide: 2 stock recommendations for Wednesday

Aditya Agarwala, YES Securities

Indian benchmark index Nifty50 ended yet another session of trade in the green with gains of 50 points despite rising volatility. Further, the benchmark indices continued to outperform the broader markets as largecap stocks played catchup trade.

A sustained trade beyond 16,600 will extend the uptrend, taking the index higher to levels of 16,700-16,750 in the near term. However, failure to sustain above 16,600 and a move below 16,550 could trigger profit booking, dragging the index lower to levels of 16,400-16,350. Moreover, the technical indicator RSI has started forming a negative divergence on a shorter time frame chart, i.e., price making higher high and indicator making lower high, which indicates that the uptrend is losing steam and can witness minor profit booking before resuming the upward journey.

Equity recommendation

Bata India: BUY

• CMP: Rs 1,730
• Target: Rs 1,820
• Stop loss: Rs 1,660

The stock has resumed an uptrend after breaking out of a narrow consolidation pattern on good volumes. Technical indicator RSI has turned upwards after forming a positive divergence, confirming the bullishness.

HDFC AMC

: BUY

• CMP: Rs 2,978
• Target: Rs 3,120
• Stop loss: Rs 2,900

The stock is on the verge of a breakout from a trendline resistance formed joining recent highs. Further, a sustained trade beyond Rs 3,000 will take the stock to levels of Rs 3,120. RSI is also suggesting bullishness going forward.

(Aditya Agarwala is Senior Technical Analyst, YES Securities. Views are his own.)