23 Jan , 2022 By : Kanchan Joshi
Indian benchmark indices shut shop deep in the red on Friday, making it the fourth straight session of weakness. Nifty50 ended Friday's session with a 3.5 per cent fall for the week gone by, forming a large bearish candle, setting a bearish tone for next week as well. However, bulls did manage to protect the 50-DMA triggering a short-covering rally in the late trade to close above 17,600 and form a Doji candlestick on the daily chart. Therefore, going ahead, a sustained trade above 17,700 in the coming week may spark more short-covering rallies taking the index higher to levels of 17,800-17,920.
On the flipside, failure to sustain above 17,700 may extend the corrections to levels of 17,500. Moreover, RSI has turned upwards from the extreme oversold zone after forming a positive divergence on a shorter time frame chart, suggesting that a short-covering rally may be witnessed in the coming trading sessions.
Equity recommendation
1] Biocon : BUY at CMP: Rs 377, Target: Rs 400, Stop Loss: Rs 364
The stock has turned upwards after breaking out of a narrow consolidation phase and 200-DMA resistance. Further, volumes have been encouraging in the breakout candle confirming the bullishness. RSI is also suggesting the same.
2] Pidilite Industries : BUY at CMP: Rs 2700, Target: Rs 2850, Stop Loss: Rs 2620
The stock is on the verge of a breakout from a sideways consolidation phase suggesting bullishness building up. Further, technical indicator RSI is confirming the strength dominant at the moment.
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