Accumulate long positions with stop loss of 11,180 levels
Nifty took support at 200 day SMA on September 30 and recovered more than 100 points from the intraday low and finally closed with the losses of 115 points at 113,60 levels.
Nifty formed a major bottom of 10,670 and rallied towards 11,695 recently. 50 per cent Fibonacci retracements of the entire swing is placed at 11,182 which are likely to act as a support going forward. Previous top on charts also happens to be at 11,181 levels. 200 day SMA is placed at 11,255 levels from where Nifty took intraday support and bounced back. Therefore, we belive that there are multiple supports in the range of 11,180-11,250 odd levels.
Considering the Technical evidence, we believe that recent correction is a running correction in the overall uptrend. Therefore, our advice would be to accumulate longs in the Nifty with the stop loss of 11,180 levels. On the higher side resistance is seen around 11,600 levels
ESCORTS (610) : BUY
Target: Rs 670
Stop-loss: Rs 580
Escorts stock price, after witnessing running correction for last few days, resumed its uptrend on Sept 30, where it closed above its 5 day SMA with higher volumes. Oscillators and momentum Indicators like RSI and MACD showing strength in the stock on the daily charts. In the derivatives, we have seen long build up in the Escorts Futures Therefore, we recommend buying Escorts at current market price of Rs 610 and add more on dips around Rs 595 for the upside target of Rs 580, keeping a stop loss of Rs 580 level.
Disclaimer: Views expressed are the author's own. He may have positions in one or all of the above mentioned stocks.