Day trading guide: Bank Nifty could attract profit booking if it fails to hold 32,500

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Day trading guide: Bank Nifty could attract profit booking if it fails to hold 32,500


Amit Trivedi, YES Securities


Markets remained choppy as after a negative start, Nifty made a low below 14,500. It recouped early losses but failed to surpass prior session’s high. Eventually, snapping a series of fifteen sessions’ ascending peaks, the Nifty ended near 14,600. Appearance of narrow range trade post Wednesday’s flat close could lead to some price consolidation between the 14,400-14,700 zone.

Post Wednesday’s recovery from lower levels, Bank Nifty lacked required momentum on the upside as the Private bank index continued to underperform. Inability to sustain above 32,500 could attract some profit taking.

Meanwhile, the energy index continued its gradual up move and registered record closing. Stock-specific rally within this space is likely to continue. Auto index consolidated at the upper band and failed to provide a close above Tuesday’s peak for the consecutive session.

Equity recommendation

Buy Biocon near Rs 463

  • Stop loss: Rs 447
  • Target: Rs 494
  • Holding ground above short-term averages, the stock has formed multiple lows between the Rs 450-455 zone. Consolidation phase seems to be in a mature phase and positive follow-through could resume prevailing uptrend.

Index strategy

Covered put on Bank Nifty

  • Sell January future near 32,710-32,740
  • Sell 32,000 strike put (expiry 21 Jan) near 190
  • Stop loss: 33,145
  • Target: 32,000
  • The Bank Nifty lacked required momentum on the upside post Wednesday’s indecisive candle pattern. Mild throwback towards 32,000 is possible.

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





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