Recent decline post the swing high near 10,774 has been healthy for the ongoing uptrend. The index has been respecting its 20-DEMA and has been hovering near it, also on the 30-minute scale, the upmove which commence from 10,440 has its Fibonacci supports coinciding near 10,560 zone. Also on the daily scale, the trend strength indicator is placed too far from its overbought zone and is quoting well above its 50-mark. Hence, the ongoing decline could be bought with a stop below 10,440 for an upmove towards 10,850-10,900 which is the final bearish GAP area which is yet to be filled.
Stock: Federal Bank
CMP: Rs 82.95
Strong sectoral performance and fresh breakout from its five-week consolidation range. Derivative data indicates significant jump in open interest (OI) additions in the last two sessions with the bullish price action complimenting the breakout and momentum to extend. Expect a move towards 88 and longs could be added with a stop below Rs 79.
Stock: BATA INDIA
CMP: Rs 978
Engulfing bearish on the weekly scale marked the beginning of distribution for the current series. Recent breach below 1,000 had attracted fresh shorts while the sustenance below its short-term averages augurs well for the momentum to continue further. Shorts could be maintained with a stop above Rs 992 for an immediate target towards Rs 960.
Disclaimer: The analyst may have positions in any or all the stocks mentioned above.