Headline Indices bucked its five days of losing streak to shut shop in the green as the Nifty50 index gained 33 points amidst volatility. Further, it continues to face resistance at the 20-DMA, which is placed at 14,750 and will be a stiff hurdle to breach on the upside going ahead.
In order to trigger a short covering rally just before the F&O expiry session, bulls need to take the index beyond 14,750, which will extend the rise to levels of 15,000-15,200. On the downside 14,650-14,600 will act as a strong support zone.
Moreover, technical indicator RSI is sitting in an oversold territory on a shorter time frame suggesting that a short covering rally might be on the cards ahead of the F&O expiry if bulls manage to take the index beyond the 20-DMA resistance of 14,750.
Tata Steel: BUY
CMP: Rs 729
Target: Rs 765
Stop loss: Rs 710
The Stock has broken out of a bullish flag pattern on healthy volumes, triggering resumption of the uptrend. Further, it is on the verge of breaking out of its Jan 2018 high at Rs 748. A successful breakout on good volumes will extend the uptrend to Rs 765-820. RSI has turned higher after taking support at the 60 level, suggesting that a string up move is in action.
Blue Star: BUY
CMP: Rs 832
Target: Rs 920
Stop loss: Rs 800
The stock has turned upwards after taking support at the confluence of two moving averages 20-DMA and 50-DMA, indicating bullishness. Further, it is on the verge of a breakout from a trendline resistance formed joining recent highs. Also, it has a neckline of a bullish Head & Shoulders pattern placed at Rs 857. A successful breakout on healthy volumes will resume the uptrend. Technical indicators suggest that the breakout is on cards.
Aditya Agarwala is
Senior Technical Analyst, YES Securities. Views are his own.