Day trading guide for Monday; 2 stock recommendations

After taking a pause in the prior week, bulls regained momentum in the Nifty. Defending levels of 16,400, Nifty rallied for the straight fifth session. Positive follow-up action above 16,720 is required to unlock further upside potential. Failure to do so, could attract consolidation at the upper band.

Bank Nifty continued to under-perform against the benchmark index. During the week, Bank Nifty recovered from lower levels but failed to surpass 36,000. Immediate trading band for Bank Nifty is seen within 35,000-36,000, and a breakthrough on either side could trigger directional moves.

Ratio of FMCG index vs Nifty is bouncing off the support zone. Any sustenance could continue on gradual outperformance in the FMCG space; the auto index’s consolidation at lower bands is likely to continue.


Positive traction is seen in the Infrastructure space with 90% of its components settling in green. Positive follow-up action is likely to unlock further upside potential.

Recommendations

Buy SBI Life September future near Rs 1180--1175
Stop loss: Rs 1,150
Target: Rs 1,250

With sustained move above important averages, the stock has managed to break through the recent consolidation phase. Ongoing northbound journey in uncharted territory is likely to continue.

Sell Kotak Bank September future near Rs 1,730
Stop loss: Rs 1,755
Target: Rs 1,680

After a swift decline, recovery in the recent past remained short lived. Negative follow-up action could drag the stock lower to revisit prior month’s lower levels.

(The author is Amit Trivedi, CMT, Technical Analyst - Institutional Equities, YES Securities. The views are his own).