Ashwani Gujral of ashwanigujral.com recommends buying Asian Paints with a stop loss of Rs 1545, target of Rs 1600, Pidilite Industries with a stop loss of Rs 1290, target of Rs 1340 and Voltas with a stop loss of Rs 610, target of Rs 635.
The much-warranted market pull back was seen on August 6 after a sharp sell-off in last few sessions. The optimism about a likely rate cut by Reserve Bank of India’s Monetary Policy Committee on August 7 and short covering lifted benchmark indices.
The BSE Sensex climbed 277.01 points to 36,976.85, while the Nifty50 rallied 85.70 points to 10,948.30 and formed strong bullish candle which resembles a Bullish Engulfing kind of pattern on daily charts after a Hammer pattern formation in previous session.
All sectoral indices (except IT) participated in the rally with bank, auto, metal gaining more than 1 percent. The broader markets outperformed frontliners as the Nifty Midcap index gained 2 percent and Smallcap index rose 1.8 percent.
According to pivot charts, the key support level is placed at 10,835.17, followed by 10,722.13. If the index starts moving upward, the key resistance levels to watch out for are 11,039.87 and 11,131.53.
The Nifty Bank closed at 28,022.10, up by 374.05 points on August 6. The important pivot level, which will act as crucial support for the index, is placed at 27,634.53, followed by 27,246.97. On the upside, key resistance levels are placed at 28,279.03 and 28,535.97.