Day Trading Guide: 2 stock recommendations for Monday

Aditya Agarwala, YES Securities

Indian benchmark indices shut shop deep in the red on Friday, making it the fourth straight session of weakness. Nifty50 ended Friday's session with a 3.5 per cent fall for the week gone by, forming a large bearish candle, setting a bearish tone for next week as well. However, bulls did manage to protect the 50-DMA triggering a short-covering rally in the late trade to close above 17,600 and form a Doji candlestick on the daily chart. Therefore, going ahead, a sustained trade above 17,700 in the coming week may spark more short-covering rallies taking the index higher to levels of 17,800-17,920.

On the flipside, failure to sustain above 17,700 may extend the corrections to levels of 17,500. Moreover, RSI has turned upwards from the extreme oversold zone after forming a positive divergence on a shorter time frame chart, suggesting that a short-covering rally may be witnessed in the coming trading sessions.


Equity recommendation

Biocon
BUY at CMP: Rs 377
Target: Rs 400
Stop Loss: Rs 364
The stock has turned upwards after breaking out of a narrow consolidation phase and 200-DMA resistance. Further, volumes have been encouraging in the breakout candle confirming the bullishness. RSI is also suggesting the same.

Pidilite Industries
BUY at CMP: Rs 2700
Target: Rs 2850
Stop Loss: Rs 2620
The stock is on the verge of a breakout from a sideways consolidation phase suggesting bullishness building up. Further, technical indicator RSI is confirming the strength dominant at the moment.

(The author, Aditya Agarwala, is Senior Technical Analyst at YES Securities. View are his own.)