By Shrikant Chouhan
On Tuesday, the market did much better than expected. It was one of the exceptional or unique days for the market because, despite the rise in long-term bond yields from 1.65 to 1.75 and the dollar index jump from 92.75 to 93.25, we witnessed an abnormal recovery in the market. It was at 14,500 last Friday and on Tuesday it closed above 14,800 levels. The formation of a bullish Harami the Nifty did on last Friday served as a powerful reversal formation for the market. In the previous session, all sectors except Bank Nifty and Auto performed well. If we correlate the data from the last few years and then over the last few days of the year-end, we see this type of widespread activity in the market.
On a weekly chart, the market managed to regain the levels of 14750 which is positive in the short term that would help the market break above 14,900 levels and according to wave theory a monthly close above 14,930 levels would help the market. market. to challenge the levels of 15450, which is the highest level of all time.
In short, on Wednesday, a close of the Nifty above the 14930 level would be positive for the market. Tuesday the strategy should be to buy if Nifty drops between the 14750/14700 levels and for that we need to maintain a stop loss at 14600. Wednesday we would see a rally in bank stocks, mainly because Bank Nifty closed above the 33700 level. Bank Nifty can go up to 34500/34700 above the 33700 levels. If the Bank Nifty works, the Nifty could approach the 14900 and 15050 levels. On the other side, Nifty / Sensex would find major support at 14750 and 14600 levels.
The choices of technical titles are-
Sun Pharmaceutical Industries Ltd
BUY, CMP: Rs 597.7, TARGET: Rs 630, SL: Rs 585
The stock had been in an uptrend forming higher lows on a weekly scale, however, the recent price drop from 650 highs appears to be over as the stock took several supports at the trendline. short-term bullish. On the daily time frame after a decent build up, we saw a breakout of the range and a close above 20 DAY EMA suggesting an uptrend.
BPCL (Bharat Petroleum Corporation Ltd)
BUY, CMP: Rs 430.8, TARGET: Rs 455, SL: Rs 420
On the weekly scale, the 480 area acted as the strong resistance area due to the formation of the double top which resulted in a minor correction in the stock from higher levels developing a sloping bearish channel. Nonetheless, a reversal of a significant support area on the daily chart is evident for a cool move.
BUY, CMP: Rs 1,553.7, TARGET: Rs 1,630, SL: Rs 1,520
In recent weeks the stock has been in correction mode and last week it closed near its important Fibonacci retracement point, and simultaneously 20 days the EMA acted as support for the action. Overall, a strong bullish candle with additional volume activity indicates a further leg of an uptrend from current levels.
BUY, CMP: Rs 995.8, TARGET: Rs 1,050, SL: Rs 970
Over a wider period it is observed that the stock is trading in a rectangle, even so a breakout of a triangle formation with a strong bullish candle is evident on the daily chart with decent volume action which specifies good momentum strength. Short term.
(Shrikant Chouhan is the Executive Vice President of Technical Equity Research at Kotak Securities. The views expressed are those of the author.)