Index, on Wednesday, witnessed short covering bounce post intraday breach below 11,000 levels. Close and sustenance below 11,300- its 200 DEMA- for the first time since it’s last breach on 18th February 2019 suggest downside pressure to sustain unless index recovers above 200 DEMA (11300).
With most oscillators placed in their relative oversold territory intraday, short covering rallies can’t be ruled out .However, only a move surpassing 11,300 (highest call bearing strike) could sustain on the upside. A move and sustenance above 11,300 (200 DEMA) would attract a meaningful short covering moving target to 11,420 & 11,480. An acceleration in momentum on breach below 11,000 levels would move targets towards 10,880 levels. Hence expect more opportunities outside the index until the bottom formations occur and confirmed for the ongoing downtrend.
Occurrence of “Bullish Hammer” formation on the daily scale along with a test of 100 WEMA makes it an ideal stock for short covering move targeting its gap resistance placed at 667 and 710 (200 DEMA) levels. With most oscillators in their relative oversold territory with bullish formation on the daily scale indicates the stock might be reverse sharply on the upside. The stock can be bought with a stop placed previous sessions low of 622 for a move targeting its 200 DEMA.
Disclaimer: Analyst may or may not hold positions in one or more stocks