Day Trading Guide: 2 stock recommendations for Tuesday

Nifty commenced this week on a weak note, however, it swung between positive and negative territory throughout the session. After forming consecutive third lower highs and lower lows, Nifty ended at 17,207 – down for the fourth straight session.

Nifty formed a Doji candle, suggesting indecisiveness. Also since February 3, Nifty is failing to provide a close above its 20-day average. The index will continue to remain choppy as long as it remains beneath the 17,500-17,600 hurdle zone.

India VIX rallied to settle near levels of 23. Higher VIX levels are likely to keep near term structure uncertain. Bank Nifty recovered swiftly to register day’s high above 38,000, however, inability to sustain at higher levels stalled intraday rally.

The metal index lost 2%. The appearance of multiple bearish candles ensures the influence of resistance at play. Hence, a negative follow-up action could unlock further downside potential.

Recommendations


Buy Lemon tree hotels near Rs 51.5-52
Stop loss: Rs 48

Target: Rs 60

The series of ascending tops and bottoms remain intact. Positive follow-up action to today’s bullish candle could lift the stock to revisit levels of Rs 60.

Sell Divis lab February future near Rs 4,300
Stop loss: Rs 4,380

Target: Rs 4,130

Recent recovery found stiff resistance near Rs 4,600. Swift decline thereafter ensures resumption of the multi-month downtrend.

(The author is CMT, Technical Analyst – Institutional Equities, YES Securities.)

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