The benchmark indices rebounded on October 26, with the Nifty 50 rising 0.68 percent amid positive market breadth. On the NSE, 1,867 shares advanced against 1,407 declining shares. However, the market is expected to remain cautious amid elevated oil prices, a high India VIX, and a weak broader market structure. Here are some short-term trading ideas to consider:
Jigar Patel, Senior Manager - Equity Research at Anand Rathi
Larsen & Toubro (L&T) is showing signs of base formation near the crucial Rs 3,600 level, which is emerging as a strong support zone. This level coincides with the monthly Camarilla support and a previous demand zone where buying interest had emerged earlier. The confluence of these technical factors strengthens the possibility of a recovery from current levels.
The Relative Strength Index (RSI) is holding just above the oversold zone, indicating that selling pressure may be easing. If the stock sustains above Rs 3,600, a rebound towards Rs 3,900 cannot be ruled out. However, a decisive breakdown below this support could weaken the technical structure. Given the favourable risk-reward setup near the support zone, traders may consider buying L&T with a stop-loss at Rs 3,550.
Birlasoft is showing signs of a potential bullish reversal, supported by the formation of a bullish divergence on the daily chart. This divergence indicates that the underlying selling pressure may be weakening, increasing the possibility of a recovery.