Benchmark index Nifty witnessed a 300-point cut after a weak start to the trading session ahead of the F&O expiry and the much-awaited Union Budget. Further, bears kept pushing the index lower at every minor rise to shut shop below the 14,000-mark. Nifty has now lost 5.60% from the highs of 14,750.
However, following this relentless selling by the bears, the index has now reached oversold territory on shorter time frame charts along with positive divergence on the RSI, indicating that a short covering rally may be witnessed in the coming trading session. Moreover, Nifty took support at the 50% Fibonacci retracement level at 13,940. Now a sustained trade beyond 14,070 may trigger a short covering rally, taking it higher to levels of 14,250-14,310. A breach of 13,900, however, will extend the weakness to levels of 13,750.
Dr Lal PathLabs: BUY
- CMP: Rs 2,350
- Target: Rs 2,550
- Stop loss: Rs 2,230
Stock has resumed uptrend, breaking out of a consolidation phase following a brief correction. Further, it took support at the 50-DMA, which also happened to be the trendline support placed around Rs 2,240. RSI, too, has turned northwards after taking support at the lower end of the bull zone, i.e,. 40 and forming a positive reversal with respect to price, confirming the bullishness dominant.
McDowell Holdings: BUY
- CMP: Rs 644
- Target: Rs 680
- Stop loss: Rs 620
Stock is on the verge of a breakout from a Bullish Flag pattern neckline placed at Rs 648. A sustained trade beyond the bullish flag on good volumes will resume the uptrend, taking the stock higher to levels of Rs 680. RSI is also suggesting a resumption of the uptrend as it has turned upwards after testing the 60-level, which is a sign of strength.
(Aditya Agarwala is Senior Technical Analyst, YES Securities. Views are his own.)