By Shrikant Chouhan
The benchmark indices witnessed profit booking at higher levels, the Nifty 50 ended 96 points lower while the BSE Sensex was down by 435 points. Among sectors, buying interest continued in Auto and FMCG stocks, both the indices rallied over 1 per cent whereas banking and financial stocks registered technical sell-off. Technically, on intraday charts, the index has formed a double top kind of formation which indicates further weakness from the current levels.
The index also formed a bearish candle on daily charts which is broadly negative. However, the medium term texture of the market is still on the positive side. We are of the view that, as long as the index is trading below the level of 18050/60500 the correction formation is likely to continue till 17850-17750/59800-59500. On the flip side, fresh uptrend possible only after 18050/60500 range breakout. Above which, the index could move up to 18130-18200/60750-61000. Contra traders can take long bets near 17750/59500 with strict 17720/59350 support stop loss.
Technical stocks to buy
Petronet LNG
BUY, CMP: Rs 199.6, TARGET: Rs 210, SL: Rs 194
Post decline from the highs of 220 the downward momentum has taken a pause near double bottom support. On daily charts, the counter has formed a rounding bottom formation, which suggests a revival of the uptrend from the current levels for further bullish movement.
Tata Communications
BUY, CMP: Rs 1,241.5, TARGET: Rs 1,305, SL: Rs 1,210
The stock has underperformed after hitting the all-time high level and it has witnessed a downtrend. However, in recent past sessions it entered into an accumulation phase near its important support area. Finally, a strong reversal candlestick formation indicates the resumption of a bullish uptrend in the coming horizon.
IndusInd Bank
BUY, CMP: Rs 973.25, TARGET: Rs 1,020, SL: Rs 953
On the daily chart, post reversal from its multiple support zone the stock is into a gradual up move. The structure suggests upward movement from the current level is very likely to continue in the coming sessions.
Tata Motors
BUY, CMP: Rs 458.05, TARGET: Rs 480, SL: Rs 447
On the daily charts, the counter has given a strong breakout of the Symmetrical triangle chart pattern along with decent volume activity, which suggests that the counter has enough potential for upside from the current levels.
(Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities, Views expressed are the author’s own.)
