Consolidation likely
Buy near key support and sell at resistance levels would be ideal for day traders
image for illustrative purpose
Mumbai: The Indian equity benchmarks on Thursday finished in red, snapping three session gain. The BSE Sensex was down by 770 points. Among sectors, sharp profit booking was seen in IT and reality stocks.
Technically, after a promising uptrend rally the index took the resistance near important retracement level of 59,500. It also formed a strong bearish candle on daily charts.
"We are of the view that, the short-term texture of the market is bullish and any meaningful correction should be used as an opportunity to enter in to the long side," says Shrikant Chauhan, head (equity research-retail), Kotak Securities.
For the traders, 58500-58200 would act as a strong support zone. On the flip side, 59,200-59,500 could be the immediate resistance.
"We are of the view that, post-sharp intraday correction, the index is likely to consolidate. Hence, buying near key support levels and selling at resistance would be the ideal strategy for the day traders, he added.
Stock Picks
♦ PEL: Above Rs2,560 with a target of Rs2,499 and stop loss of Rs2,750. Expecting falling channel breakout
♦ SHARDACROP: Above Rs630.10 with a target of Rs700 and Stop loss of Rs605. It has ascending triangle pattern in daily chart
♦ TATA POWER: Above Rs255.10 with a target of Rs270 and Stop loss of Rs244. It has triangle pattern
♦ BAJAJ-AUTO: Above Rs3,651.10 with a target of Rs3,780 and Stop loss of Rs3,590. It has inverted head and shoulder in daily chart
♦ PIIND: Above Rs2,485 with a target of Rs2,600 and Stop loss of Rs2,430. It has morning star pattern formation at support level (Source: CapitalVia)
