Investors can look at M&M, UltraTech, JSW Steel & Torrent Power
The index seems to be on the cusp of the bears till it sustains below 11400 level.
Technical Analyst, Emkay Global Financial Service
Where are We? After the 2-day strongest move of the decade, the Nifty faced resistance at 11700 level which was its previous reversal area. The index has retraced almost 61.8 per cent retracement level of the earlier rise; whereas, the mid- and small-cap sectors lost their previous gains. It indicates bears are back after a short sting of the bulls. The index is hovering around its 200-day long-term moving average. Momentum indicator RSI reading comes at 53 level which shows neutral force in the market.
What is in Store? The index seems to be on the cusp of the bears till it sustains below 11400 level, which is an immediate hurdle for the bulls. The index is forming probable inverted flag pattern which indicates continuation of negative movement. Implication of the pattern will get invalidated above 11400 level. On the downside, the index can have potential support in the range of 11000 to 10900.
What could Investors Do? The earnings season has just started and it will be the key event to watch out for. Technically, the index had offered good investment opportunity as it is down almost 12-15 per cent from the top. The recent decline can be used to expand the portfolio as many stocks had retraced their important long-term support levels. Stock specific, investors can look at M&M, UltraTech Cement, JSW Steel and Torrent Power.