The stock market halted its downtrend on Friday and Nifty 50 managed to defend the 21,900 mark. As long as the index holds this level, the rangebound trade may continue, with attempts towards 22,200-22,300. If it closes below 21,900, Nifty 50 may then correct up to April lows of 21,776, according to experts.
The 21,900 mark coincides with the rising support trendline, low of the big bearish candle on May 9 as well as the lower end of the Bollinger band.
Overall, the trend is still in control of the bears. For the week ended May 10, the Nifty 50 fell 1.87 percent to 22,055 and formed a large bearish candlestick pattern on the weekly timeframe following Doji candlestick pattern formation in the previous session.
"Thursday's low coinciding with the 89EMA at 21,900 serves as immediate support, followed by previous swing lows in the 21,800 - 21,700 range," Rajesh Bhosale, technical analyst at Angel One.
On the upside, the zone between the 20 and 50EMA, around 22,200 - 22,300 presents a formidable obstacle, he feels.
Jigar S Patel, senior manager - equity research at Anand Rathi said the index is nearing the lower boundary of an upward channel, and a breach could signal deeper market concerns. "Looking ahead, a drop below 21,900, the previous swing low of 21,777, may induce market panic."
Conversely, the FIIs' long-short ratio in index futures at around 32 percent suggests an oversold market nearing a potential rebound. Hence, he feels the resistance is expected at 22,300, and closing above the same may be potentially confirming a bottom until election results.
He advised traders to remain light from here on as the market is now approaching the final phases of the election.
Moneycontrol collated a list of top 10 stock picks recommended by experts from a 3-4 week perspective. The stock price of May 10 is considered for the calculation of returns.
Expert: Vinay Rajani, CMT, senior technical & derivative analyst at HDFC Securities
Oil India: Buy | LTP: Rs 619 | Stop-Loss: Rs 590 | Target: Rs 725 | Return: 17 percent
The stock has been consolidating in the narrow range for last 6 sessions. Primary trend of the stock has been bullish as it has been forming higher tops and higher bottoms.
The stock is placed above all important moving averages, indicating bullish trend on all time frames. Indicators and oscillators have been showing strength in the current uptrend.
Tech Mahindra: Buy | LTP: Rs 1,264 | Stop-Loss: Rs 1,215 | Target: Rs 1,380 | Return: 9 percent
On April 26, the stock broke out from the downward sloping trendline on the daily chart and price rise was accompanied by higher volumes. Post breakout, stock witnessed correction and reached a gap support on the daily chart. After taking support in the gap, stock resumed its primary uptrend. Indicators and oscillators have turned bullish on the daily chart.
Axis Bank: Buy | LTP: Rs 1,120 | Stop-Loss: Rs 1,048 | Target: Rs 1,210 | Return: 8 percent
The stock registered running correction and now seems to have resumed its uptrend. Stock has taken support near its previous swing high on the daily chart. Primary trend of the stock has been bullish with higher tops and higher bottoms. The stock is placed above all important moving averages, indicating bullish trend on all time frames.
Expert: Amol Athawale, VP-technical research at Kotak Securities
Indus Towers: Buy | LTP: Rs 330.55 | Stop-Loss: Rs 320 | Target: Rs 355 | Return: 7 percent
After the gradual decline in the counter from the higher levels, the downward momentum had stopped. On daily charts, the counter has found support and reversed its trend from its important retracement zone along with decent volume activity. The formation suggests a revival of the uptrend from the current levels.
GSFC: Buy | LTP: Rs 223 | Stop-Loss: Rs 215 | Target: Rs 240 | Return: 7.6 percent
After a short-term correction, Gujarat State Fertilizers & Chemicals (GSFC) stock reversed from its important support levels. The technical indicators like RSI (relative strength index) are also indicating further up trend from current levels, which could boost the bullish momentum in coming horizon, making it a favourable candidate on risk and reward basis.
Expert: Riyank Arora, technical analyst at Mehta Equities
IREDA: Buy | LTP: Rs 165 | Stop-Loss: Rs 157.50 | Target: Rs 192 | Return: 16 percent
Indian Renewable Energy Development Agency (IREDA) stock has touched its major anchor VWAP (volume weighted average price) support mark of Rs 162.95 on its daily charts. With the RSI (14) being near 49, it is expected that the stock should pick up momentum in the upcoming few trading sessions.
Contraction in price movement and volatility is indicating that we might see a surge in IREDA towards Rs 192 and above in a few days. A strict stop-loss should, however, be kept at the Rs 157.50 mark to manage risk well.
National Aluminium Company: Buy | LTP: Rs 174 | Stop-Loss: Rs 164 | Target: Rs 195 | Return: 12 percent
The stock has re-tested its breakout mark of Rs 170.45 on its daily charts. With the RSI (14) being around 47 and witnessing a minor uptick and the overall trend being positive on the metal stocks, it is expected that National Aluminium should eventually head higher towards a target of Rs 195 and above.
The stock has also made a Bullish Harami pattern on its daily charts, which is indicating the possibility of a good upside move in the stock. A strict stop-loss should, however, be kept around Rs 164 to manage risk well.
BPCL: Buy | LTP: Rs 618.65 | Stop-Loss: Rs 590 | Target: Rs 650 | Return: 5 percent
The stock has formed a Bullish Harami candlestick pattern on its daily timeframe charts. With volumes being nearly 3 times its average (30 days) volume and the RSI (14) around 54 with a minor uptick, it is expected that the stock should head higher towards Rs 650 and above.
A set stop-loss should be kept at Rs 590 mark to manage risk well on BPCL. The strong technical structure and bullish price action make the stock a good low-risk candidate at current levels.
Expert: Om Mehra, technical analyst at Samco Securities
Vedanta: Buy | LTP: Rs 411 | Stop-Loss: Rs 392 | Target: Rs 448 | Return: 9 percent
Vedanta stock is forming higher highs and higher lows indicating a sustained uptrend. The stock is placed well above its short-term (20-day) moving averages suggesting bulls are in total control.
The RSI comfortably holding 67 levels is gradually inching higher indicating strength in the stock. The earlier resistance has now transitioned into a support level.
Hence, based on the above technical structure, one can initiate a long position at CMP Rs 411 for a target price of Rs 448. The stop-loss can be kept at Rs 392.
SAIL: Buy | LTP: Rs 157 | Stop-Loss: Rs 145 | Target: Rs 173 | Return: 10 percent
Steel Authority of India (SAIL) stock has experienced a correction from its peak and has established strong support at the 38.2 percent Fibonacci retracement level. The RSI has stabilized, holding above 50 levels.
Additionally, the stock continues to trade above the 50-day daily moving average (DMA).
Hence, based on the above technical structure, one can initiate a long position at CMP Rs 157 for a target price of Rs 173. The stop-loss can be kept at Rs 145.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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