By Shrikant Chouhan
After a sharp pullback rally from 14415/48720, benchmark indices hovering in the variety of 14750 to 14950/ 49600-49000. Currently, the Nifty is trading close to its preceding resistance level and on the intraday chart it has formed decrease top rated formation which suggests short-term weakness. However, the bigger texture of the market place is nevertheless bullish and most likely to continue in the medium term. Technically, if indices succeed to trade above the 50 day SMA or 14700/48500 level then uptrend formation will continue up to 15000/ 49500. Further upside may perhaps also continue which could lift indices till 15200/ 50600. However, dismissal of 14700/ 48500 could trigger additional weakness up to 14600-14500/48200-47950.
Technical stock picks
State Bank of India (SBI)
Acquire, CMP: Rs 364.65, TARGET: Rs 383, SL: Rs 355
For the last two months, the stock has been in a downward channel soon after hitting the all-time higher at about 425, having said that it managed to bounce back from its essential retracement zone and at present forming an Ascending Triangle chart formation exactly where it appears that breakout is most likely to happen from its resistance line.
Havells India
Acquire, CMP: Rs 1,029.65, TARGET: Rs 1,080, SL: Rs 1,000
Post decline from the highs of 1230, the stock has formed a robust base in its numerous help region of about 1000, meanwhile a positive crossover in Stochastic close to help and a breakout of the quick-term sloping trend line on the every day chart indicates a new leg of bullish movement in the counter.
BATA India
Acquire, CMP: Rs 1,368.45, TARGET: Rs 1,440, SL: Rs 1,340
On a broader time frame chart, it is evident that the stock has a robust demand zone in the 1300 and 1400 variety exactly where earlier it has formed a drop, base, and rally formation. Recently a Cup and Handle pattern on the every day chart can be seen therefore robust upside is anticipated from the present levels.
Power Grid Corporation of India
Acquire, CMP: Rs 223.4, TARGET: Rs 235, SL: Rs 216
The stock is trading into an Ascending Triangle chart pattern with incremental volume activity on the every day chart, on top of that, all important technical trend indicators such as Stochastic and ADX are robust and intact. Thus breakout up move from the present level is pretty most likely to happen in the close to term.
(Shrikant Chouhan is Executive Vice President (Equity Technical Research), Kotak Securities. Views expressed are the author’s personal.)