Sun Pharma has support around 370-390 but it seems unlikely that the stock will hold on to that level.
The Nifty50 closed in the red for the 9th consecutive day in a row on May 13 to post its longest losing run in the past 8 years. The index lost over 600 points in the last 9 sessions, which pushed it below the crucial support level of 100-days EMA as well as 11,200 levels.
The final tally on D-Street – the S&P BSE Sensex plunged 372 points to close at 37,090 while the Nifty50 fell 130 points to close at 11,148.
Indian markets witnessed a rangebound trade in the first half of the trading session but bears soon took control and pushed the index in deep red in the second half.
These four factors weighed on D-Street: a) on-going tensions between the US & China kept investors on the edge across Asian markets, b) weak economic data as well as, and c) disappointing results from India Inc, d) In terms of technicals, a break below 100-days exponential moving averages followed by 11200 levels added to selling pressure. The next target for the index is placed around its 100-days EMA placed around 11035 levels. The near term resistance zone, on the other hand, shifts lower to 11280-11300.
After closing below 100-days EMA, the next support for the index is placed around 200-days EMA and resistance is placed around 11300 levels on the upside, suggest experts.
"Technically, with Nifty moving further down, the short-term trend remains down. The Nifty could now head towards the next major supports of 11024, which corresponds to the 200-day EMA. Any pullback rallies could find resistance at 11300," Subash Gangadharan, Technical Analyst, HDFC Securities, told Moneycontrol.
"The recent selloff seems to be more due to weak global equity sentiments on account of the ongoing trade war between USA and China. Given this scenario, we recommend investors to remain on the sidelines till we see evidence of a new technical uptrend," he said.
We have collated technical outlook on stocks which moved the most on D-Street and what should investors do now:
Analyst: Manish Yadav, Head of Research, CapitalAim
Sun Pharma: Time to go short!
This stock has been trading below 200-DMA and making lower highs and lows for some time now. On May 13, it breached Rs 400 levels on the downside.
It has support around 370-390 but it seems unlikely that the stock will hold on to that level. Traders can go short on any up-move. The stock closed 9.3 percent lower at Rs 396.85.
ITC: Traders can buy the stock around Rs 280
The stock is trading above its 200-DMA and has strong support around 260-275 levels. We are positive on this stock and the next up move can take it towards Rs 310-317 levels in the short to medium term. Traders can buy the stock around 280 with a stop loss of 269 for a target of 310. The stock closed 2.6 percent lower at Rs 289.85.
Eicher Motors: Traders can stay away
The stock was moving in a tight range for the last couple of days but in Monday's trade, it broke down more than 5 percent now. This downslide may continue with short-term support around Rs 18,800. Traders should stay away from this stock.
The stock closed 7.6 percent lower at 18,766. It hit a 52-week low of Rs 18600 on the BSE.
YES Bank: Time to book profits or exit
YES Bank is oversold and can give a bounce back. It can be bought as a short-term trade around 152-55 levels with a stop-loss below 149 with a target of 170. However, anyone holding the stock should look at getting out at any bounce back.
The stock closed 5.5 percent lower at Rs 154.85 on May 13.
L&T: Medium-term traders may initiate buy around Rs 1,250
This stock may trade lower in the near-term and test lower levels of Rs 1240-50 in the short term. I will not advise investors to buy the stock for the short term. However, medium-term traders may initiate buy around 1250 for a target of 1380-1400 in the medium term.
In the long term, the stock looks positive and can trade around over Rs 1500 levels in a year’s time. The stock closed 2.8 percent lower at Rs 1317.
IDFC First Bank: Stay away for now
This stock has peaked out around 56 levels and is now sliding towards 40. In the short-term, it may go lower towards Rs 35 levels. Traders must stay away from this stock and try to get out in any bounce back. The stock closed 12% lower at Rs 42.95.
Indiabulls Housing Finance: Short term traders can trade with a stop-loss around 650
This stock has made a peak of 919.40 and since then it is making lower highs and lower lows. In the medium-term, we expect the stock to slide further towards 575 level, but in a pullback, it can give an up-move from here to 710 levels.
Short term traders can trade with a stop-loss around Rs 650 and anyone holding the stock can sell on bounce-back. The stock closed 5.2% lower at 659.(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)