Further, bulls did protect the 200-DMA once again which accords with the recent lows placed at 16,800 levels and may continue to act a key support on the downside and a trend decider.
If bulls fail to protect this support of 16,800, corrections could extend to levels of 16,400 which was the low of December last year and then 16,000 a psychological support level.
On the flip side, if the index sustains above the immediate hurdle of 17,200, then a short covering rally can play out taking the index higher to levels of 17,450 which is again a cluster of recent highs.
Largely, the headline index is still oscillating in a range between 16,800 on the downside and 17,400-17,800 on the upside. Moreover, market participants should not lose sight of the Indian VIX which has closed above the 25 resistance mark and is now headed to 30 levels which could trigger extended period of volatility and corrections
Recommendations:
EICHER MOTOR
Buy@CMP Rs 2,725
Target: Rs 2,890
Stop Loss: Rs 2,630
The stock has broken out of a narrow cluster of consolidation phase suggesting a possible short covering rally in the coming sessions. Technical Indicators are also favouring the same.
TCS
Sell@CMP Rs 3,586
Target: Rs 3,410
Stop Loss: Rs 3,675
The stock is approaching the lower end of the sideways range after breaking down from a bearish flag pattern suggesting weakness. Further, RSI is also suggesting lower levels in the coming sessions.
(The author, Aditya Agarwala, CMT, is Technical Analyst–Research at YES Securities)
