By Shrikant Chouhan
After a sharp fall, in the present week the benchmark indices opened with a gap and post powerful opening the index was hovering in the variety of 16450-16600. However, on Tuesday in the late afternoon, it lastly cleared the resistance of 16590 and succeeded to close above the exact same which is broadly positive for the marketplace.
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Technically, the texture of the pullback rally indicates that the marketplace is probably to consolidate among 16500 to 16720 cost ranges. In addition, on the intraday chart, the index has formed larger bottom formation which suggests additional uptrend from present levels. We are of the view that, as extended as the index is trading above 10 day SMA or 16500 uptrend wave probably to continue up to 16700-16750. On the flip side, beneath 16500 uptrend would be vulnerable. Sector certain, so far present rally largely dominated by IT, FMCG and monetary stocks. The formation suggests substantial cap FMCG and monetary stocks would probably to outperform in the close to term. So any brief term corrections ought to be used to add excellent FMCG and Financial stocks with the medium term time horizon.
Technical stocks to obtain
Wipro
Invest in, CMP: Rs 632.50, TARGET: Rs 662, SL: Rs 617
The stock is in the powerful uptrend wave, on everyday and weekly charts it has formed powerful breakout continuation formation. Rs. 617 would be the important help level for the trend following traders, above the exact same uptrend wave probably to continue up to Rs. 662.
Reliance Industries Ltd (RIL)
Invest in, CMP: Rs 2,178, TARGET: Rs 2,265, SL: Rs 2,135
The stock is regularly taking help close to 50 day SMA, on everyday charts it has formed powerful reversal formation which indicates additional uptrend from present levels. For the positional traders, 10 day SMA or Rs. 2135 would be the sacrosanct help level, above the exact same reversal wave probably to continue till Rs. 2265.
Bajaj Auto
Invest in, CMP: Rs 3,717, TARGET: Rs 4,865, SL: Rs 3,640
From the last couple of months the stock is witnessing cost correction, at present, the stock is trading close to 200 day SMA. The oversold texture suggests higher probabilities of pullback rally from present levels. We are of the view that, 200 day SMA would act as a important help zone and powerful pullback rally is not ruled out if it succeeds to trade above Rs. 3640 level.
State Bank of India (SBI)
Invest in, CMP: Rs 417, TARGET: Rs 438, SL: Rs 408
In this month so far, the stock corrected more than 5 %. After a brief term correction the stock has formed Hammer followed by bullish candle formation. Which is broadly positive for the SBI Ltd. Currently, the stock is trading close to its prior help level and momentum indicators recommend higher probabilities of fresh uptrend rally if the stock succeeds to trade above Rs. 408.
(Shrikant Chouhan is the Executive Vice President, Equity Technical Research at Kotak Securities. Views expressed are the author’s personal. Please seek advice from your monetary advisor just before investing.)