Headline equity index Nifty50 remained volatile last week. Last Monday, it fell till 16,800 zone. However, a sudden change in the sentiment lifted Nifty towards 17,500. Eventually, Nifty ended at 17,276 – down for the consecutive week. Nifty’s recent structure shows descending tops and flat bottoms near 16,800 zone. The levels of 17,500 needs to be surpassed to regain momentum on the upside, while an inability to hold current levels could drag the index till 17,100-17,000 levels.
Bank Nifty underperformed last week, losing 2.4 per cent on weekly close. A negative follow-up action is likely to attract correction till 37,000.
Recoveries in the broader indices remained short lived. A major upside in the near term is unlikely. A stock-specific correction is possible.
Recommendations:
Sell Cipla February futures near Rs 910-914
Stop loss: Rs 934
A series of descending tops and recent throwback from the hurdle zone indicates the influence of resistance at play. On the flip side, the stock is likely to revisit the levels of Rs 865.
Buy Gujarat Gas Ltd near Rs 660-658
Stop loss: Rs 634
Target: Rs 710
After losing 15% from last month’s high, the stock has regained momentum on the upside.
(The author is CMT, Technical Analyst - Institutional Equities, YES Securities. Views are his own)
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