Day trading guide: 2 stock recommendations for Tuesday

Amit Trivedi, YES Securities

Inability to provide follow-up action has become a normal occurrence in the recent past and these are the classic characteristics of the consolidation phase. Post prior week’s decline, Nifty commenced this week on a gap up note. But the index soon erased all gains and entered the negative territory to make a low of 15,645. The index eventually ended at 15,693. Nifty may continue to oscillate within the 15,600-15,900 zone and sector/stock-specific theme is likely to continue.

Recent few weeks’ chart setup of Bank Nifty shows ascending tops and bottoms. However, stability with sustained move above 35,500 is required to regain momentum on the upside.

The realty index outperformed significantly, accumulating 4% in today’s trade. Momentum picked up as it sustained above prior month’s high and managed to surpass 2018 year’s high. Realty stocks will continue to do well from a near-term perspective.

After a multi-month up move, the Nifty PSE index has been lagging behind since mid-June 2021; major move in this index in near term is unlikely.

Recommendations:

Buy Welspun India near Rs 113-111

• Stop loss: Rs 105
• Target: Rs 122

Welspun India continues to trace out bullish patterns. Positive breakthrough above prior week’s high on a comparatively higher volume warrants a positive outlook for the stock.

Buy NBCC near Rs 54.5

• Stop loss: Rs 52
• Target: Rs 60

Short-term moving average lines have converged near the current levels. Since convergences follow divergences and vice versa, at the very least, we can expect much more net movement from here. Appearance of a bullish candle with identical open and low at current juncture could mean that the recent congestion is in a mature phase.

(Amit Trivedi is CMT, Technical Analyst - Institutional Equities, YES Securities. Views are his own.)