Buy CEAT, sell Sun Pharma, says Sacchitanand Uttekar

Nifty outlook and top technical calls from Sacchitanand Uttekar of Tradebulls Securities

Nifty outlook and top technical calls from Sacchitanand Uttekar, AVP – Technical (Equity) at Tradebulls Securities:

 

Nifty Outlook

 

Despite diminishing momentum index continues to scale higher. On the daily scale a breach below the psychological level of 10,000 could distort the sequence while a move above 10,150 on a close could revive the momentum back. Due to the ongoing earnings season, stock specific action could continue but most of the index participants are showing diminishing strength. As we expect the seasonality effect to be witnessed in the current series we advise participants to book profits where ever possible & await for the corrective wave to pass through. A decisive breach below 9,920 could drag the index towards the intermediate support zone placed near 9,700-9,660.

 

Stocks:

 

CEAT - BUY

CMP: Rs 1,927

Stop Loss: Rs 1,883

Target: Rs 2,020

 

Positive sector outlook & fresh breakout from a triangle pattern on the daily scale is well supported with volumes which augurs well for momentum to continue. Fresh trading longs could be initiated with a stop below 1883 for a pattern target upto 2020.

 

SUN PHARMA - SELL

CMP: Rs 523.55

Stop Loss: Rs 545.30

Target: Rs 460

Breakdown from the inverse flag formation on the weekly scale indicates the ongoing bearish trend to continue. Trading positions could be initiated with a stop above 545.30 for a pattern target upto 460 which also coincides with the lower end of the broader channel in which the stock has been oscillating for since February 2016.

 

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