Day Trading Guide: 2 stocks recommendations for Thursday

Amit Trivedi, YES Securities

After witnessing three upward gapping actions in the recent past, Nifty turned volatile and went through a mild correction off the record high of 18,604. Today post a flat start, the rally in Nifty remained short lived. It entered negative territory and fell as far as 18,209. Nifty filled its upward gap which it formed on October 18. Sustenance above 18,200 is likely to attract minor consolidation, whereas any decisive break below 18,200 could extend this week's decline.

Meanwhile, Bank Nifty outperformed the benchmark index amid volatile trade. Ratio of Bank Nifty vs Nifty is sustaining above its prior month’s peak. Sustenance at current levels could continue Bank Nifty’s outperformance.

The Nifty Energy Index fell for a consecutive session. Post multi-month rally, mild consolidation/under-performance is possible in the Energy space.

Recommendations

Canara Bank | Buy near Rs 194.5
Stop loss: Rs 189
Target: Rs 205

A series of ascending tops and bottoms on short term charts remains intact. Swift recovery in today’s trade could mean resumption of the recent uptrend.

UBL October futures | Sell near Rs 1,680
Stop loss: Rs 1,720
Target: Rs 1,600

The stock is due for mean reversion with immediate hurdle placed near Rs 1,710. Negative follow-up action could drag the stock towards the Rs 1,600 zone.

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