Stock picks of the day: Watch out! A ‘dead cat bounce’ cannot be ruled out in Nifty

The market continued to struggle as Nifty extended losing streak to fifth consecutive day. The index closed around the 200-DEMA of 10,750 mark levels and is now approaching towards the 10,680 levels which is the rising trendline of the Ascending Triangle pattern on the daily chart.

Going forward, a dead cat bounce cannot be ruled out. 

Bank Nifty, on the other hand, outperformed the Nifty as the index found support around its 100-DEMA. Our weekly chart analysis indicates that Bank Nifty has also not breached below the previous week’s low of 26885 which will now act as a crucial support zone. On the upside, 27300-27350 is the stiff resistance for the index.

The small-cap 100 index is precariously poised at triple bottom support levels which were seen in October 2018. If the index manages to hold above the 5670 levels on a closing basis, a meaningful bounce back is likely in the sector.