By Rohit Singre
The Nifty took U-turn after touching its strong resistance placed around 9,200 levels earlier this week. We have seen long positions being liquidated at a higher level, which signifies traders need to be cautious at this time.
The Nifty50 registered an inverted hammer candle kind of formation on Tuesday and a Hammer like pattern on Wednesday suggesting bear are having control at the moment. The Nifty continued its losing streak for the fourth consecutive session and trading out of its rising channel pattern.
Overall data indicate that on downside 9000PE having highest open interest suggesting strong support and the upside 9200CE having highest open interest showing strong resistance.
The Nifty also closed a day below 9,140 levels which is again a negative factor for the index. If the index is able to sustain below 9140 levels index, it will drag the markets towards 9020-9000 levels in coming sessions.
Overall, we expect Nifty to trade in a range of 9000-9275 zone and we recommend 'buy on dip' and 'sell on rise' strategy to be used for an ongoing week.
Top five Technical stocks to Buy-Sell which can give return up to 20 percent in the short-term.
We are quite upbeat on this stock since it has given a decisive breakout from its Cup & Handle pattern three weeks before. Volume activity too picked up during the price movement.
On the daily chart, stock formed a bullish flag pattern by taking support near Handle. We expect prices to break above 144 levels in coming sessions.
The stock has retesting its breakout point and giving closing above the same with forming reversal candle pattern, which we believe a pullback is in offing before the index starts the next leg of the rally.
Thus, bonanza recommends a buy on this stock at a current price to decline up to 135 levels for a target of Rs.165. The stop loss can be kept at Rs.127 on a closing basis.
Mahindra CIE: BUY above 231| Target Rs 270 | Stop Loss Rs 197 | Upside 20%
The share of Mahindra CIE touched high of Rs 313 on Aug 2015, thereon stock fell hard up to 155 levels and went in consolidation mood.
The stock consolidated for exactly one year and given a breakout in the first week of April with significant volume hinting prices are ready to touch fresh high in short run.
On the flip side, stock is trading in rising channel pattern on daily chart and price currently trading near upper band of the channel, holding above 231 levels we expect prices to continue its short term trend whereas breaking below 215 levels may drag stock to 208 levels which will again a good buying level.
Considering above technical setup bonanza recommends a buy above strategy on stock for the target of 270 with a stop loss of 197 on a closing basis.
Cadila: SELL | Target Rs 400 | Stop Loss Rs 463 | Downside 8%
The stock rose from 355 to 465 levels with strong volume and took pause at its strong resistance zone. Since nine-week stock hovering near 466 zone which is strong resistance for stock.
On the weekly as well we observe some candle reversal pattern which is normally formed at the reversal of trend.
We observed small rising channel breakdown & negative divergence on daily as well as a weekly chart. The RSI broke its range of 54 and closed at 49 suggesting more weakness in near-term.
Considering above technical fact, Bonanza recommends a sell call on stock at a current market price to any upside near 448 levels for the target of 400 with keeping a stop loss above 463 closing basis.
Ujjivan: SELL below 382 | Target Rs 340 | Stop Loss Rs 411 | Downside 11%
Ujjivan was in consolidation for the span of three months by taking support from lower side & resistance at higher side and recently the stock has given breakdown from its consolidation mood suggesting weakness in near-term.
The stock is trading below its 200-daily moving average and 50-Exponential moving average on the other hand stock also taking support at its 100 daily moving average which is reading at 383 levels.
On the daily chart, the stock is forming bearish flag formation which will get activate below 383 levels, so 383 will be considered as strong support for the stock. Breaking below 383 levels only, the stock can drag to 340 levels.
So considering all negative technical factors, Bonanza recommends a Sell call on Ujjivan only below 382 levels for the targets of 340 with keeping a stop loss above 411 on a closing basis.
Manugraph India came in limelight on Tuesday when it broke its strong range of 43-63 levels and closed above the same suggesting short-term upside in counter. Volume activity was huge at the time of breakout.
On the weekly chart, stock was trading in pennant pattern which is also broke and the price rose in presence of volume. The RSI also has given a range breakout above 66 currently trading near 67.50 levels.
Volume activity was increased in late Feb when the stock was trading at the lower band of the pennant and finally stock gave a breakout hitting 73 levels in short run.
By consideration all technical aspect we recommend a buy on the stock with current market price or any dip for the target of 73-80 with keeping a stop loss at 56 levels on closing basis.
Disclaimer: The author is Senior Research Analyst, Bonanza Portfolio Ltd. The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.