Day Trading Guide: 2 stock recommendations for Monday

Amit Trivedi, YES Securities

Continuing the fall from the week before, selling pressure intensified in the past week as Nifty50 sustained below 17600. Following Thursday’s bullish candle, the headline index failed to provide positive follow-up; in fact, in Friday’s trade Nifty50 opened below the prior session’s low and fell as much as 16986. Friday’s movement took the form of a ‘separating line’ candle pattern, and the said pattern at the current juncture indicates a sudden change in the market sentiments and the immediate hurdle is now near the 17400 level.

Bank Nifty fell for the third week in a row with a higher magnitude; moreover, it lost 14.4% from the record high. The index might see a minor recovery might, however, the mid-point of the past week’s decline (i.e.37100) could turn out to be immediate resistance.

The auto index underperformed significantly, shedding 8.5% this week. India VIX jumped 27% to settle above the level of 21, higher price volatility is expected to continue.

Recommendations

Buy Glenmark Pharma near Rs 530-526
Stop loss: Rs 513
Target: Rs 560
The V-shaped recovery ensures panic bottom at the recent low. Sustenance above the short-term averages is likely to keep the near-term outlook positive. The ongoing rally is expected to continue till the Rs 585 level.

Sell Titan December futures near Rs 2320
Stop loss: Rs 2360
Target: Rs 2240
The stock is going through a corrective phase to digest its multi-month uptrend. The appearance of a bearish candle, breaking below the support of Rs 2350, warrants a negative outlook for the stock.

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