Day Trading Guide: 2 stock recommendations for Tuesday

Indian markets ended yet another volatile session marginally higher, led by a swift recovery from the low point of the day. The bulls stepped in to protect the 16,780 levels which happened to be closer to the 61.8% Fibonacci retracement level of the previous up move. Further, Nifty-50 formed a Doji Hammer candlestick pattern, suggesting a possible pause in the corrective wave.

A sustained trade above the high of the Doji i.e. 17,160 & 17,200, which was the previous cluster of lows, can trigger a short-covering rally to levels of 17,350-17,500. However, failure to trade beyond this cluster of resistances would resume the volatile session of trade, dragging the index lower to levels of 16,900-16,700.

Moreover, RSI on a shorter time frame has turned upwards after forming a positive divergence and the formation of a bullish candlestick pattern to indicate a short-covering rally could be witnessed in the coming sessions.


Stock recommendations

Godrej Consumer
BUY: CMP Rs 913
Target: Rs 970
Stop Loss: Rs 880

The stock is on the verge of a breakout from a falling wedge pattern, suggesting bullishness is building up in the counter. Further, RSI has also turned north after forming a positive divergence suggesting higher levels in the coming sessions.

Kotak Bank
BUY: Rs 2,020
Target: Rs 2,200
Stop Loss: Rs 1,935

The stock has broken out of a consolidation phase on good volumes after forming a double bottom at Rs 1,935 levels, suggesting bullishness. Further, RSI has also turned upwards after making a positive reversal.

(The author is Senior Technical Analyst, YES SECURITIES. Views expressed are personal.)