Day Trading Guide: 2 stock recommendations for Tuesday

Aditya Agarwala, YES Securities

Indian benchmark index Nifty50 ended Monday's session marginally in the green led by buying in the auto and cement stocks while banks continued to drag the index lower. Further, it is knocking at the upper end of a narrow trading range placed at the 18,350 level, a successful breakout from this range will resume the uptrend taking the index higher to levels of 18,500-18,600.

However, a sustained failure to breakout may extend the sideways trading action with key support on the downside at 18,200-18,100. While the price actions remain sideways in the past three trading sessions, the RSI indicator has started to form lower highs which suggest that the index is losing momentum and a failure to breakout from the trading range in the next few sessions could trigger profit-booking, dragging the index lower to sub 18,000 levels.


Equity recommendation

JSW Steel
BUY at CMP: Rs 699
Target: Rs 735
Stop Loss: Rs 676
The stock has broken out from trendline resistance and narrow consolidation phase suggesting bullishness. Further, volumes have been good in the breakout confirming strength. Technical indicators are also favoring the same.

DLF
BUY at CMP: Rs 424
Target: Rs 445
Stop Loss: Rs 410
The stock has broken out of a narrow consolidation phase on good volumes suggesting bullishness. RSI has also turned upwards after taking support at the lower end of the bull zone.

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