Day Trading Guide: 2 stock recommendations for Thursday

Aditya Agarwala, YES Securities

Indian benchmark indices ended Tuesday's session in the green following a series of downticks as bulls finally stepped in to protect the 78.6 per cent Fibonacci retracement level placed at 16,825. Further, a sustained trade beyond 17,300 may trigger an extended short-covering rally in the coming sessions taking the index higher to levels of 17,500-17,650. On the flip side, failure to move beyond 17,300 could resume the choppy sessions dragging the Nifty50 index lower to levels of 17,000-16,800.

Moreover, RSI has turned upwards from the extreme oversold zone after forming a positive divergence on a shorter time frame chart suggesting that an extended short-covering rally could be seen in the coming sessions above 17,300 levels. However, traders should remain cautious as volatility could remain at elevated levels as suggested by the Indian VIX which is trading above the 20 levels.

Equity recommendation

SBI Card
BUY at CMP: Rs 850
Target: Rs 910
Stop Loss: Rs 810
The stock has turned upwards after taking support at the previous cluster of supports indicating a possible uptrend in the coming sessions. Further, a sustained trade above Rs 860 will take it higher to levels of Rs 910. Moreover, RSI has also turned higher from the oversold zone suggesting a short-covering rally may be seen.

NTPC
BUY at CMP: Rs 135
Target: Rs 142
Stop Loss: Rs 130
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.

(The author, Aditya Agarwala is Senior Technical Analyst at YES Securities. Views are his own.)