The index (Sensex & Nifty) remain listless as the action shifts to mid-and small-cap stocks. Volatility has cooled off substantially post the binary event (general election outcome), and hence, any uptick / pullback in India VIX could see some pessimism. Option pain for the current expiry around 11800 should act as a critical support zone, while the Highest CE OI congestion still resting at 12000 remains the immediate hurdle.
We expect the index to consolidate within the range of 11800-12000 in the coming sessions while the outperformance could continue in mid-and small-cap indices. The broader structure remains intact for the journey towards 12,460 eventually, as most of the technical parameters are yet to witness an overbought state. Hence, a 'buy on declines' strategy remains apt from here on, with the base now shifting from 11,000 to 11,500 now.
Stock: FINOLEX CABLES
CMP : Rs 460
After 12 months of decline and two months of consolidation, the stock now looks ready for an up move. The occurrence of multiple 'Bullish Hammers' on the weekly scale, followed by the positive convergence of the short-term averages augurs well for a sustainable trend to evolve. Also, the weekly RSI is now quoting above 50, which supports the bullish outlook theory. A breach above its 200 DEMA placed around Rs 480 should accelerate the momentum. Longs could be considered now with a stop below Rs 445 on a weekly closing basis for an immediate move towards Rs 510.
Stock: JSW STEEL FUT.
The stock continues to remain in a short–short unwinding cycle as it breaks below short-term averages. Post a decent pullback, JSW Steel was unable to break above its resistance area - around Rs 300 - while the decline in the last session was supported with strong OI additions, which primarily warrant fresh shorts. We expect momentum to continue towards Rs 270 zone, while stop loss could be placed around Rs 286.50 while initiating fresh shorts.
Disclaimer: Sacchitanand Uttekar is DVP – Technical (Equity) at Tradebulls Securities. Views expressed are his own. He may / may not have positions in the above-mentioned stocks / index