Trading picks for the week: GEPL Capital

GAIL India - Pull back rally

GAIL has been in a strong downtrend since last thirteen months from its all time high of 538.The rally which has started from the low of 164 has topped out around 538 after a consistent rise of almost 24 months. Prices have retraced almost 50% (Fibonacci retracement ratio) in last one year and have come down to new two years low of 360.On daily chart this stock is trading into a narrow range of 365-405 from almost last three to four months indicating at least a pause in the decline. The stock is forming a higher top higher bottom on momentum indicator around the range of 365-370 on weekly charts indicating the reversal of trend. Talking about weekly charts, on this time frame Gail has very strong support area in the range of 350-360 (50% Fibonacci retracement ratio) which will prove to be an area of short term trend reversal which can push the price on the higher side. Keeping all this things in mind, Gail seems to be an attractive buy from risk reward perspective for a rally with a stop loss placing at 365 for a target of 405.

Rallis India - Sell

Rallis India has given a breakdown from its long term rising trend line indicating a larger degree trend reversal. The breakdown has come on a backing of strong volumes which confirms the reversal of ongoing bullish trend. The stock has also given a close below its short term as well as long term moving average which indicates a further decline in prices in coming time. Viewing the chart on daily time frame, it has given a close below its short term and medium term moving average indicating downtrend for this stock. The intraday chart is in oversold territory hence a short term bounce may come around 133-135 which will provide an opportunity for positional traders to create a short side position with a stop loss placing at 142 for a target of 105.

Shares held by Central Governments/State Governments

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies 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.