Day trading guide: 2 stock recommendations for Monday

The Nifty50 index ended higher for a straight third session, however, after marking the day’s high at 14,698, it failed to cling on to higher levels. After a two-day rally, momentum in the index seems to be stalling near the 14,700 zone. Eventually, the Nifty formed an indecisive candle with a comparatively large upper shadow. It has retraced about 61.8 per cent of the previous decline. Hence, the index requires a decisive breakthrough above 14,700 to continue its recent rally.

Snapping a two-day winning streak, the Bank Nifty index ended below 32,000. Negative follow-up action could attract a mild pullback till 31,500. After a multi-month decline, the Nifty Media index rebounded around 2 per cent, and any sustenance above the current levels could trigger a short-term rally.

RECOMMENDATIONS

Buy Bharti Airtel near Rs 540-536

• Stop loss: Rs 526
• Target price: Rs 562

The recent structure shows a series of ascending tops and bottoms. Any sustenance above the Rs 540 mark could lift the stock towards Rs 560.

Sell Dr Reddy's Laboratories near Rs 4,920-4,940

• Stop loss: Rs 5,030
• Target: Rs 4,710

The recent swift throwback from higher levels could mean that stock is due for mean reversion. On the flipside, the stock is likely to revisit the levels of Rs 4,700.

(Amit Trivedi is CMT and Technical Analyst - Institutional Equities at YES Securities. Views are his own)