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Add strong, selective stocks ahead of Budget

Today, the market has formed ‘the three black crows candlestick pattern’. Consisting of three consecutive bearish candles at the end of a bullish trend, the three black crows signals a shift of control from the bulls to the bears.

Sensex down 400 points, Nifty below 15,000
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Sensex down 400 points, Nifty below 15,000

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Mumbai: Today, the market has formed 'the three black crows candlestick pattern'. Consisting of three consecutive bearish candles at the end of a bullish trend, the three black crows signals a shift of control from the bulls to the bears. The Sensex is also diverging negatively on a daily chart and that would trigger further weakness. In brief, the BSE Sensex index is heading for 48,100/47,500 levels, if it breaks 48,400 decisively. On the higher side 49,000 and 49,400 would be crucial levels to surpass and sustain.

"As the market is falling vertically, we are of the view that ahead of the budget we should look for adding strong stocks and selective stocks to our positional portfolio between 48,100 and 47,500 levels," says Shrikant Chouhan, EVP, equity technical research at Kotak Securities.

SUNPHARMA: BUY, CMP 586.4, TARGET 615, STOP LOSS 575

After a rounding top formation the stock took support at its demand area and formed a strong reversal candlestick pattern supported by rising volume activity on daily chart. Resumption of an uptrend rally is expected from current levels.

HDFCBANK: BUY, CMP 1462.85, TARGET 1535, SL 1430

The stock has formed a doji candlestick formation after a sustained selloff from last few days. Moreover the rise in volume action near its 20 day SMA and closing above the same should be positive for the stock in near term.

DIVISLAB: BUY, CMP 3569.05, TARGET 3750, SL 3490

After the rise from 3000 to its all-time high of 3915 levels the stock started its downward movement and took support at its 50 per cent Fibonacci retracement zone of the entire rally on daily chart. It can emerge as a strong upside potential candidate with regards to the recent phenomenal rally in pharma space.

ICICIPRULI: BUY, CMP 501.9, TARGET 525, SL 490

Double bottom formation near important support area along with highest volume activity seen in last few days suggest up move in near term from current levels.

PNB: SELL, CMP 34.15, TARGET 31.9, SL 35.1

A breakdown below rising trend line and price closing below its 20-day SMA indicates weakness in the counter will persist in coming few trading session.

(Source-Kotak Securities)

Kumud Das
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