Nifty forming bearish pattern on charts; stay stock-specific: Vinay Rajani

On Tuesday, the Nifty saw selling pressure coming in the second half. It ended the session with bearish engulfing pattern on the daily chart, which is preceded by small "Doji" candle on the daily chart, adding more confirmation to probable bearish trend reversal.

To confirm short term trend reversal, Nifty needs to breach the low of 18,377 in the coming sessions. Any level below 18,377 could

push Nifty towards next support of 18,000-17,950. The level of 18,600 has become strong resistance for the Nifty and unless that is surpassed, traders should remain bearish. However, stock specific bullish trading opportunities could be there due to ongoing result season.

Stock picks:
 

Buy Infosys (Rs 1,823) | Target: Rs 1,900 | Stop-loss: Rs 1,770

The stock has broken out from last 10 week's price consolidation with rise in volumes. The Nifty IT Index has resumed its primary uptrend. Primary trend of the stock has been bullish with higher tops and higher bottoms. The stock has been holding levels above its medium to long term moving averages. Technical setup of Infosys is one of the strongest amongst all large cap IT companies

Buy JK Tyre (Rs 166) | Target: Rs 175 | Stop-loss: Rs 158

The stock has broken out from Symmetrical triangle on the daily charts. Price breakout is accompanied by higher volumes. It has been consolidating for last 11 weeks. Tyre stocks have started outperforming from last one week. Nifty Auto Index has broken out on the medium term charts. Primary trend of the stock has been bullish with higher tops and higher bottoms. Stock has been holding levels above its medium to long term moving averages.

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Disclaimer: Vinay Rajani is Senior Technical Research and Derivative Analyst at HDFC securities. He doesn't hold any position in the stocks. Views expressed are personal