Market outlook and top two trading ideas by Prabhudas Lilladher

MARKET VIEW

Nifty has held on to 11,900 levels with daily trend still being down, market seems to be consolidating or moving in a narrow range for now. The support for the day is seen at 39,500/11,850 for Sensex and Nifty, respectively, while resistance is seen at 40,080/12,000. IT sector along with FMCG are in positive, Britannia, Nestle, HUL and ITC are stocks with positive bias. Bank Nifty would have a range of 30,730-31,330.

BUY MOTHERSON SUMI 

CMP: Rs 119.05     

TARGET: Rs 140      

STOP LOSS: Rs 110

The stock has been in consolidation for quite some time maintaining a good base at around Rs 112 levels. Currently, it has given a positive candle to signify strength and has potential to rise further in the coming days. The relative strength index (RSI) has also indicated a trend reversal and has signaled a buy to maintain the positive bias. With good volume participation witnessed, we recommend a buy in this stock for an upside target of Rs 140 keeping a stop loss of Rs 110.

BUY CADILA HEALTH  

CMP: Rs 247.60      

TARGET: Rs 280       

STOP LOSS: Rs 235

The stock has witnessed a decent correction in recent times and currently has formed a double-bottom formation pattern on the daily chart to signify a good base near Rs 240 levels and it has the potential to rise further from this zone. The RSI has alos recovered from the oversold zone to indicate a trend reversal and signal a buy. With good volume activity seen and favourable indicators, we recommend a buy in this stock for an upside target of Rs 280 keeping a stop loss of Rs 235.

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Disclaimer: The analyst may have positions in any or all the stocks mentioned above.