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Nifty Outlook
Nifty commenced its strong run with a 'Break Away Gap' at 7222 & is yet to witness an 'Exhaustion Gap' which would complete the gap sequence. The momentum oscillator RSI has now reached the overbought zone but is yet to show signs of weakness. The recent occurrence of a 'Harami Cross' augurs well for exhaustion of the ongoing momentum but this candlestick pattern will be activated on a close below 8110 which could trigger the correction. Hence though the broader trend remains bullish an intermediate correction towards 8000 cannot be ruled out at this juncture.
EMAMI: BUY
Last Close: Rs 1015
Target : Rs 1140
Stop Loss: Rs 980
Emami Ltd. saw a breakout from the ‘Rounding formation’ with significant volumes. The occurrence of the ‘Bullish Harami’ on the daily scale marks the termination of the pullback move. We expect Emami to resume its upmove & hence the stock could be accumulated with a stop below Rs 980 for an immediate target upto Rs 1140.
MONSANTO INDIA: BUY
Last Close: Rs 2408
Target : Rs 3200
Stop Loss: Rs 2200
'Doule Bottom' at Rs 1550 confirmed the long term bottom. A breach above Rs 2600 would activate the 'Rounding Formation' which would unfold further extension of the bullish trend upto Rs 3200. The recent momentum is well supported with volumes & hence the stock could be participated with a stop below 2220.
CADILA HEALTHCARE: SELL
Last Close: Rs 327
Target : Rs 295
Stop Loss: Rs 338
Negative sector outlook. The continuation pattern on the weekly scale now seems mature for a fresh breakdown which indicates weakness to persist. Fresh shorts could be initiated with a stop above Rs 338 for an immediate decline upto Rs 295.
Disclaimer: Motilal Oswal Securities ( MOSL ) is regulated by the Securities and Exchange Board of India ("SEBI") and is licensed to carry on the business of broking, depository services and related activities. MOSL is in the process of getting registered under SEBI - Research Analyst Regulations. MOSL, the spokesperson or his relatives, do not have financial interest in the securities mentioned above. The spokesperson has not served as a director, employee or officer at the subject company in the last 12 months. MOSL or its associate might be involved in market making for the subject company or have potential conflict of interest.
Sacchitanand Uttekar is an Equity Technical Analyst at Motilal Oswal Securities
