Stock picks of the day: Investors should use dips towards 10600-10750 to create long positions

The Nifty on the weekly chart formed a bullish hammer like a candle with a long lower shadow indicating strong buying demand emerging from 61.8% retracement of December-February rally (10334 – 11118) at 10633.

The sharp rise in volatility during the current week saw the index oscillating in the 200-points broad range of 10700-10900. The Nifty failed to sustain above the upper band of consolidation (10900) owing to escalating geopolitical concern, in turn helping stochastic oscillator to cool off (currently placed at 75). 

After all the negative news, the index managed to form a higher high-low, suggesting market resilience. Going ahead, we expect the index to move out of the ongoing consolidation (10900-10600), eventually paving the way for the next leg of the up move.

Meanwhile, the market would remain volatile in the coming week on account of geopolitical concerns and any corrective decline during the current volatility towards the support area of 10750 – 10600 should be capitalised as an incremental buying opportunity for the next leg of the up move.