Day trading guide: 2 stock recommendations for Thursday

Amit Trivedi, YES Securities

Continuing Tuesday’s decline, Nifty fell sharply towards 15,513. Momentum on the downside picked up as it broke below 15,600 mark. However, Nifty recouped most of its intraday losses and eventually managed to settle above 15,700, thereby keeping the recent trading band of 15,600-15,900 intact.

Appearance of small bodied bearish candle with large lower shadow indicate that the bulls outstripped bears near prior month’s low. Recovery from lower levels ensures that there is more consolidation ahead between the 15,600-15,900 band.

After losing 2 per cent in the previous week, Bank Nifty fell towards 34,100. Bank Nifty continued its underperformance; hence, stability is required to attract buyers’ interest.

Defending levels of the 50-day average (which is intact on closing since 10 May), the Infrastructure index rebounded from lower levels. Positive follow up action could attract some outperformance.

Metal index is approaching its May months’ peak levels; sustenance could unlock further upside potential.

Recommendations

Buy KEC International near Rs 420

• Stop loss: Rs 410
• Target: Rs 440

Recent decline found renewed buying interest near 50-day average, and since then it is holding ground above levels of Rs 410. Sustenance could lift the stock towards the Rs 440 zone

Sell Mcdowell-N August futures near Rs 650

• Stop loss: Rs 672
• Target: Rs 640

Swift sell-off has broken the support zone. Any negative follow-up action will indicate that the stock is due for mean reversion to digest its multi-month gains.

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