Nifty50 ended with a loss of over 1 percent and closed below crucial short as well as long-term moving averages for the week ended January 4.
Global turmoil weighed on market sentiment in the first week of January, but bulls managed to push the index back above 10,700 on closing bases. On weekly basis, Nifty formed a bearish engulfing pattern.
If Nifty manages to hold above 10,750 on a closing basis, then bulls have a fighting chance of pushing the index back above 10,800-10,850 levels. However, a slip below 10,600 levels could put bears back in control, suggest experts.
“The Nifty formed a Hammer candle on a daily scale followed by Bearish Engulfing Body on a weekly scale which indicates that bulls and bears both are having a tug of war. Formation of Hammer suggests a bounce back move while the formation of Bearish candle on weekly scale suggests multiple barriers at higher zones,” Chandan Taparia, Associate Vice President, Analyst-Derivatives, Motilal Oswal Financial Services told Moneycontrol.
“It has been making lower highs - lower lows from last three trading sessions and needs to negate the same by holding above 10750-10777 zones to witness a short-term bounce towards 10850 and then 10929-10985 zones while on the downside immediate supports exists at 10650-10600 zones,” he said.
Taparia further added that the index has been forming alternative positive and negative weekly close from last eight weeks and got stuck in a broader trading range in between 10450 to 10985 zones so requires a decisive range breakout to commence the next leg of the rally.
Here is a list of top 10 short-term trading ideas that could give 3-12% return in the next 1 month:
Analyst: Dinesh Rohira, Founder & CEO, 5nance.com
Escorts Ltd: Buy| LTP: Rs 724| Target: Rs. 759 | Stop-loss: Rs 680 | Upside: 5%
Escorts maintained an upward trajectory for over the past one month after a making a healthy consolidation from a higher price-band of 722-720 odd levels towards a low of 585 levels.
It took strong support at the rangebound level of 560-550 zone to reserve the trend into bullish trajectory where it managed to break out from its 100-days moving average level placed at 711 levels.
The scrip also witnessed a decent volume growth during the same period and formed a small bullish candlestick pattern on both weekly as well as daily price chart.
The momentum indicator outlined a positive divergence in price with its RSI at 63 levels, coupled with MACD managing to make a bullish crossover in past to trade above its Signal-Line.
We have a buy recommendation for Escorts which is currently trading at Rs. 722.20
Hindalco Industries: Sell| LTP: Rs 210| Target: Rs. 201 | Stop-loss: Rs. 228| Downside: 4%
Hindalco is trading in a negative trajectory during the entire week and slipped below its crucial level of 200-days moving average placed at 228 odd levels, and thus witnessed a sustained selloff throughout the week.
Although, it made a decent rally after forming low of 192 levels toward a high of 259 levels on its six-month price chart, but it failed to continue with momentum to trade in sideways direction mostly favoring bearish regime.
Despite its attempt to reverse the trend in the previous week, the scrip witnessed a selloff in last four sessions which signaled a bearish sentiment. It formed a long bearish candlestick pattern on weekly price chart coupled with small bearish on its daily chart.
Further, a weekly RSI stood at 41 odd levels indicating negative divergence, and MACD continues to trade below its Signal-Line. We have a sell recommendation for Hindalco which is currently trading at Rs. 209.20
Jindal Steel & Power: Sell| LTP: Rs 152| Target: Rs 142| Stop-loss: Rs. 155 | Downside: 6%
Jindal Steel & Power remained in a consolidation phase in last six-month falling from a higher level of 240 towards a low of 160 odd levels.
Although, it marginally rebounded towards 190 odd levels but it failed to sustain the momentum to further form a low of 140 levels, and subsequently it fell below its 200-days moving an average of 189 levels on closing basis.
The scrip currently trades below all the moving average levels which indicate ongoing selling pressure. The scrip formed a solid bearish candlestick pattern on weekly chart coupled with long bearish candlestick pattern on the daily price chart.
The momentum indicator continued to outline weak trend with its weekly RSI at 36 level which signals downward divergence in price coupled with MACD trading below its Signal-Line on the weekly chart. We have a sell recommendation for Jindal Steel which is currently trading at Rs. 146.50.
Analyst: Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in
Vedanta: Buy| LTP: Rs 193| Target: Rs 203| Stop Loss: Rs 183| Upside 5%
After the recent fall, this counter made a bullish reversal formation as it registered a 'Piercing' pattern in the last session from around its critical support of Rs 190.
Hence, as long it trades above 187 kinds of levels, one should initiate long positions in this counter for a target of Rs 203 with a stop of Rs 185.
Bharti Infratel: Buy| LTP: Rs 284| Target: Rs 320| Stop Loss: Rs 270| Return 12%
This counter appears to have registered a consolidation breakout after a prolonged fall from the highs of 481. Besides, it decisively closed above its 100-days moving average (DMA) which in the past, suppressed its pullback attempts suggesting the possibility of a sustained short-term rally.
Hence, traders can adopt a two-pronged strategy and buy now and on declines around 275 for a target of 320 and a stop below 270 on a closing basis.
Bajaj Auto: Buy| LTP: Rs 2,734| Target: Rs 2,830| Stop Loss: Rs 2,690| Return 3%
Price patterns of Bajaj Auto are quite interesting as this counter has not participated in the recent fall and appears to have made a decent base around Rs 2700 levels.
On the pullback attempts from the said base, it can easily head towards Rs 2,830 kind of levels. Positional traders should buy into this counter for a target of 2,830 with a stop below 2690 on a closing basis.
Brokerage Firm: SMC Global Securities Ltd
DCB Bank: Buy| LTP: Rs 173.80| Target: Rs 194| Stop Loss: Rs 158| Return 12%
The stock closed at Rs 173.80 on 4th January, 2019. It made a 52-week low at Rs 139.85 on 1st October 2018 and a 52-week high of Rs. 206.50 on 9th January 2018.
The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 166.49
As we can see on the chart that stock was consolidated in the range of 140 to 174 levels for three months and formed a “Continuation Triangle” on weekly charts which is bullish in nature. Last week, the stock gained over 4 percent and has given the breakout of pattern and also managed to close above the same.
So buying momentum may continue for coming days. Therefore, one can buy in the range of 171-172 levels for the upside target of 190-194 levels with a stop loss below Rs 158.
Kajaria Ceramics: Buy| LTP: Rs 506| Target: Rs 550| Stop Loss: Rs 480| Return 8%
The stock closed at Rs 506.10 on 04th January, 2019. It made a 52-week low at Rs 310 on 25th October 2018 and a 52-week high of Rs. 764.90 on 10th January 2018. The 200-days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 480.59.
The stock has recovered sharply from a yearly low of 310 and tested 500 levels in short span of time. Moreover, it was forming an “Inverted Head and Shoulder” pattern on weekly charts, which is considered to be bullish.
Last week, stock registered gains over 4 percent and has given the neckline breakout of pattern and also closed near week’s high along with the volumes, which indicates buying is more aggressive for the stock.
Therefore, one can buy in the range of 500-502 levels for the upside target of 540-550 levels with a stop loss below 480.
Brokerage Firm: Karvy Stock Broking
Apollo Hospitals: Buy| LTP: Rs 1291| Target: Rs 1355| Stop Loss: Rs 1220| Return 5%
Apollo Hospital Ltd has traded the week with a positive bias. The stock has closed the week with a positive return of more than 4 percent.
Adding to that, the stock is trading well above its major moving averages on daily charts with positive price structure, indicating positive momentum in the stock is likely to continue in the coming trading sessions as well.
On oscillator front, the 14-period RSI has given positive crossover with the 9-day signal line and poised with a bullish bias, indicating that stock is likely to continue its outperformance in the coming trading sessions as well.
The Parabolic SAR (Stop & Reverse) on the daily chart is trading below the price which reflects that buying will remain intact in the counter in the coming trading sessions.
From the above observation of price momentum, it seems the stock is likely to trade with positive bias in the coming trading sessions also.
Therefore, we recommend Smart Traders to initiate a Long position in the counter around 1275 levels with a stop loss placed below 1220 for the higher target of 1355 levels.
Container Corporation of India: Buy| LTP: Rs 678| Target: Rs 700| Stop Loss: Rs 658| Return 3%
Container Corp in the week passed by closed with a gain of nearly 0.80 percent, whereas benchmark index NIFTY-500 closed around with a cut of around 1% outperforming the NIFTY-500 index while the benchmark NIFTY-50 closed with a cut of around 1.19 percent clearly indicating the outperformance of the said stock.
On the price chart, the stock has found support around 670 levels and appears to resume its uptrend where its 21-DEMA moving average is also placed.
The momentum indicators like 14 period RSI on the daily and weekly charts is trading above its signal line indicating a bullish bias in the near term.
On the derivative front, the stock has seen short closure post expiry of the December 2018 series, and some long addition was also witnessed in the last few trading session.
Hence, we recommend Smart Traders to initiate Long position near 675 levels for the higher target of 700 levels, keeping a stop loss below 658 levels.
Disclaimer: 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.
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