Day Trading Guide: Stock recommendation for Tuesday

Amit Trivedi, YES Securities

Following the two-week decline, Nifty50 commenced this week on a positive note near 17,300; however, ahead of the Budget event, Nifty50 traded within a narrow trading band of 146 points, which is its lowest daily range since 17th January.

The appearance of a narrow trading range indicates indecisiveness ahead of the key event. Budget days are usually volatile, hence follow-up action needs to be closely watched out for. The high of the large bearish candle formed on 24th January is likely to act as an immediate hurdle zone, hence a decisive breakthrough above 17,600 is required to gain required momentum on the upside.


Bank Nifty turned choppy and traded within its prior session’s range. A whipsaw action cannot be ruled out in Bank Nifty during the Budget day.

Recommendation

Buy ITC 230 Feb call option near 2.4-2.1
Stop loss: 0.4
Target: 8
Holding support at Rs 210, the stock has gained positive traction. Sustenance above Rs 220 could lift the stock till Rs 235-240 zone.

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