By Shrikant Chouhan
After a sharp recovery in the last week, once again the benchmark index took resistance near 15900/ 53200 resistance level. On an intraday time frame, a couple of times the market attempted to sustain above 15880/ 53000 but due to consistent selling pressure at higher levels it failed to cross 15900/ 53200 resistance mark which is broadly negative for the index. The market was down mainly due to consistent and aggressive selling from FIIs in the Asian markets.
On Tuesday, due to steep weakness in Dr Reddy’s Laboratories, we saw massive liquidation in other pharmaceutical companies. The Nifty Pharma index fell more than 4 per cent during the day, which is the biggest intraday fall after the month of December 2020. The Nifty Metal index closed in the positive territory for the 4th consecutive day. We are of the view that, the setup of the market is range bound and as we are approaching the support of the lower boundary (15650/15600)/ 52100-52200, we need to be stock-specific. On the higher side, 15810/ 52700 and 15900/53000 would be resistance levels. Technically, the 20 day and 50 day SMAs would play an important role in the near future, we can expect a quick pullback rally if the index succeeds to close above the same. On the flip side 15600/ 52200 or 50 day SMA would be the key support levels for the bulls below the same uptrend would be vulnerable.
Technical stocks to buy
BUY, CMP: Rs 417.35, TARGET: Rs 440, SL: Rs 405
The stock has given a breakout of its Ascending Triangle chart pattern along with a strong bullish candlestick pattern and huge volume on the daily chart, additionally, all major technical trend indicators such as ADX and Stochastic are indicating strength for further momentum to sustain.
Larsen & Toubro (L&T)
BUY, CMP: Rs 1,605, TARGET: Rs 1,690, SL: Rs 1,570
After the sharp up move from the levels of 1500 with a massive volume, the stock is trading in a range-bound movement well above its short term moving averages as a result the formation of a Flag chart pattern on the daily scale is formed which points to bullish movement to resume in the coming sessions.
HDFC Life Insurance Company
BUY, CMP: Rs 669.7, TARGET: Rs 705, SL: Rs 655
For the past few weeks, the counter is trading into a range-bound territory and currently, it is available near to its demand zone of 660 which could act as a strong base for the stock simultaneously making it a favorable candidate in terms of risk and reward therefore current setup is signaling for a bullish up move in the near term.
BUY, CMP: Rs 1,123.6, TARGET: Rs 1,180, SL: Rs 1,100
On the monthly scale, the stock has presented a robust rally, post strong breakout from the zone of 1100 the stock has taken a pause in the momentum within a narrow range however short term texture is looking attractive for bullish continuation formation in the near term.
(Shrikant Chouhan is Executive Vice President, Equity Technical Research at Kotak Securities. Views expressed are the author’s own.)