Pushkaraj Sham Kanitkar
GEPL Capital
GEPL Capital
A lackluster week ended with a loss of 31.40 points or 0.35 percent at 9,119.40 on the NSE. The index has shown a bearish follow-up to the Engulfing candle of the earlier week, with a lower high of 9,217 against a high of 9,247 in the earlier week.
This observation indicates weakness in the short-term and prices may see further price correction towards 8,950 – 9,000 levels. Thus, 9250 - 9275 now remains strong resistance zone.
Higher time frame remains bullish with 'higher top and higher bottom' formation still intact and hence weakness in the short-term towards 9,000 to be a buying opportunity. Change in directional trend will only be seen below 8,950 levels.
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Aditya Birla Nuvo: BUY| Target Rs 1800| Stop Loss Rs 1563| Return 10%
AB Nuvo has given an engulfing bullish candle on the weekly chart. On the backdrop, it has created a fresh 11-week high. GEPL capital maintains a positive orbit over the last two & half months, as indicated by positive alignment of shorter-term moving averages like 15 & 25 DMA and also longer term moving averages like 50 & 200 DMA.
A steady rise in delivered quantity accompanied by a surge in positions on Thursday signifies strength. The futures side remains pretty light. “We expect a move onto Rs 1,715 (around 5%) from current levels, which if crossed further may move onto Rs 1,800. A stop loss can be placed a bit below the multiple touch points Rs 1,563,” said Kanitkar.
Apollo Tyres: Target Rs 272| Stop Loss Rs 210| Upside 15%
The stock has created a 3-week high accompanied by a huge rise in the volume. A breakout from a long consolidation spanning 6 months, aided by a fall in crude oil and rubber prices, a raw product basket.
The weekly pattern since March 2017 has shown a bull bias after a good consolidation spanning, 2-3 months. “We expect a move onto Rs 272 (around the 10% from the 52-week highs) stop loss placed a bit below the breakout level of 210,” said Kanitkar.
HDFC: Target Rs 1575| Stop Loss 1445| Return 4%
A bellwether amongst the Nifty50 heavyweights, the stock has shown an all-time weekly closing high, with a strong bull grip. The earlier move from Rs 1364 to Rs 1531 has met with a 38.2% retracement in last week, which saw a correction to Rs 1467.
We feel prices may move in a bounce back till the recent high around Rs 1531 and then may extrapolate till Rs1575. A fair risk-reward seems possible with a stop loss for the trade be placed at Rs 1445, a bit below the 50% retracement of earlier rise.
Bharti Airtel: SELL| Target Rs 297| Stop Loss Rs 355| Return 13%
The scrip has remained perineal weak all through the last 2 years, with recurring selling seen around the Rs 370-380 mark.
The recent move saw the formation of a lower top around Rs355 as compared to the Rs380 levels created in last week of Feb 2017. The same cause has seen a break of the 20-DMA after a gap of almost 3 months.
A dipping RSI around 43 indicates the waning strength in the prices. A break below the 200 DMA placed at Rs335 may put the stock in a downward spiral with possible targets around the Rs297 mark.
The negative move can be negated if the stock manages to reclaim recent top placed at Rs355, and hence the stop may be placed a bit above the level on a closing basis.
JSW Steel: SELL| Target Rs 175| Stop Loss 205| Return 7%
In line with the overall weak trajectory in the metal sector (a 4% correction in the index over the week), the prices have remained falling off the cliff over the whole of last 2 weeks.
The last week once again saw a substantial rise in the delivered quantity indicating a consistent selling at higher levels with the prices waning all through the week.
The relative strength index (RSI) after having reached overbought levels around 72 has softened off a shade short of the 50 mark, showing a waning strength.
The prices are on course for a correction towards the 3-month lows of around the Rs175 mark. The bearish view would stand negated only on a closing above the recent high placed at the Rs205 mark.
Disclaimer: The author is AVP - Technical Research at GEPL Capital. 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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