Nifty rallied for the straight third session on Wednesday, reclaiming levels of 16,700 and registering record high of 16712. However, inability to sustain above 16,700 erased early gains and Nifty eventually ended flat at 16,635, up 10 points.
Appearance of small bearish candle with relatively large upper shadow infers mild profit taking at higher levels. Follow-up action needs to be closely watched as negative follow-up could attract consolidation between 16,500-16,700 levels.
Meanwhile, after a positive start, Bank Nifty soon entered the negative territory. Intraday rally remained short lived as Bank Nifty failed to surpass levels of 36,000; consolidation within a band of 35,000-36,000 looks plausible.
After two days of decline, bulls regained momentum in the FMCG index. Stock-specific rally within the FMCG space is possible.
Recommendations
Sell Bharat Forge September future near Rs 736-739
Stop loss: Rs 760
Target: Rs 685
Snapping a multi-month up move, the stock entered a corrective phase, but recovery remained short lived. Hence, negative follow-up action could drag the stock below the Rs 700 zone
Sell Suv TV September future near Rs 490-492
Stop loss: Rs 504
Target: Rs 467
Recent swift decline has broken the cluster of the support zone. Failed recovery ensures influence of resistance at play.
(Amit Trivedi is CMT, Technical Analyst - Institutional Equities, YES Securities. Views are his own.)
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