Day Trading Guide: 2 stock recommendations for Monday

Aditya Agarwala, YES Securities

The Indian equity markets ended trade sharply lower amidst weakness persistent in the equity markets globally. Further, the Nifty50 shut the shop down by 230 points below its 50-DMA placed at 17,460.

However, not before staging a minor pullback from the low point of the day, which also happened to be the GAP area. Going ahead, this GAP area of 17,270 will act as a crucial support and failure to hold the same could extend the corrections dragging the index lower to 17,170-17,100.


On the flip side, a sustained trade back above the 50-DMA i.e. 17,460, may trigger a short-covering rally to levels of 17,600-17,670. Moreover, the index remains locked in a range currently narrowing down, between 17,800 on the upside and 17,000 on the downside.

Recommendations:
JSW STEEL
BUY@CMP at Rs 671
Target: Rs 710
Stop Loss: Rs 645
Stock is on the verge of a breakout from a narrow channel pattern neckline at 697. A sustained trade beyond this resistance will resume the uptrend taking it higher to levels of 710. RSI is also favouring a bullish trend.

HAVELLS
SELL @CMP at Rs 1,175
Target: Rs 1,110
Stop Loss: Rs 1,210
The stock has turned downwards from the 200-DMA again and broken down from a bearish flag pattern suggesting weakness. The RSI has also turned south below the 40-level confirming the bearishness.

(The author, Aditya Agarwala, CMT, is Technical Analyst–Research at YES Securities. Views are his own.)