Recovering from early losses, the Nifty surpassed the 14,500-mark and made a high of 14,591. The benchmark index is up by ~4% this month so far, after recovering 87% in the year 2020 from its yearly low. Sustained move above short-term averages and renewed buying interest on intraday decline kept the outlook positive. Post Monday’s gaping action, levels of 14,350 could turn out as immediate floor.
After recent underperformance, bulls regained momentum in the Bank Nifty. Appearance of bullish candle ensures support near 31,500. Positive follow-up action is essential for gaining further momentum on the upside. Within banking space, PSU Bank index stood out strongly posting gains of ~6%.
IT and Pharma index bucked the recent uptrend, while recent price structure of FMCG index shows consolidation at upper band.
On the options front, massive open interest additions are visible at 14,500 put strike for the current weekly expiry. India Vix rallied for the straight third session to settle near levels of 23.
Buy ITC near Rs 206-205
- Stop loss: Rs 196
- Target: Rs 226
- Post multi-month breakout on the upside, the stock has defended levels of Rs 200 during the recent decline. Appearance of a bullish candle at current juncture ensures renewed buying interest at support levels. Hence, positive follow through could lift the stock till Rs 226 zone.
Buy JSL near Rs 94-93
- Stop loss: Rs 87
- Target: Rs 106
- Sustained move above important averages and consolidation breakout suggests more room on the upside.
Amit Trivedi is CMT, Technical Analyst – Institutional Equities, YES Securities. Views are his own.)