Stocks for day trading: Day trading guide: More upside seen in metal stocks

Northbound journey continued at the uncharted zone for Nifty as it opened on a gap up note above the 15,000 mark. Throughout the session, it traded above the 15,000 level. However, it swung between 119 points, which is its lowest daily high/low range since January 11. Appearance of another bullish candle ensures an immediate floor near the 14,900 zone.

Nifty breadth remained positive with 40 out of the Nifty50 stocks settling in the green. Also, all the sectoral indices except FMCG and PSU Bank index ended in the green. Improvement in market breadth post Friday’s pause indicates renewed buying interest in many stocks. However, due to the on-going earning season, stock-specific rally themes are likely to continue.

Bank Nifty lacked the required momentum on the upside as it failed to surpass prior session’s peak. Appearance of the inside bar chart pattern suggests indecisiveness near 36,000. Nevertheless, outlook is likely to remain positive as long as levels of 35,000 are decisively held.

Metal index stood out strongly, gaining for the straight sixth session. The metal index has more room on the upside. Hence, stock specific-rally is likely to continue.

Equity recommendation

Buy Tata Steel BSL Ltd near Rs 44

Stop loss: Rs 41

Target: Rs 50

The stock rebounded from the support zone. Positive follow-up action post Friday’s surge unlocks further upside potential.

Derivative recommendation

Buy 315 strike January call option near 14-15

Stop loss: 8.5

Target: 27

Surpassing levels of 300, the stock has gained positive traction. Series of ascending tops and bottoms remains intact.

(
Amit Trivedi is CMT, Technical Analyst – Institutional Equities, YES Securities. Views are his own.)