Shrikant Chouhan: 5200 will act as major hurdle for the market
“Nifty continued the bullish trend which was in effect from last week. Inability to trade above the level of 5150 triggered the weakness and markets found it easy to test support of 5050 levels. Support was witnessed at 5050 levels as a result of positive global cues in international equities. Our markets also reacted positively and Nifty tested the level of 5140 comfortably. Market bounced back from the lows but were not able to close above the 5150 level for the week.
Technically the level of 5200 will act as a major hurdle for the market. On the lower side 5060 will act as a major support for the market and dismissal of 5060 may result into quick sell off to 4990 minimum and maximum to 4910 levels. Closing above the level of 5200 will indicate reversal in the trend. These are the preferred sector for the long trade in the market with a broader perspective. Look for Dr.Reddys, Sun Pharma, ITC, Colgate and Hind Unilever for the long trade at good support. Mixed action witnessed. Longs can be built at considerable support in Tata Motors, M&M. Support buying should be seen in the sector stocks only at lower levels. Picks are BGR , BHEL, Bhusan Steel and Adani Power. Inflow seen during the last couple of sessions. Look for support longs in Titan Inds. Cairn india remain the preferred buy side stock at good support levels. Intiate long strangle at 5200 call and 5000 put with cost of 115 and stop loss of 50 with target of 170-210."
The author is Head- Technical Research, Kotak Securities
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