Shitij Gandhi
After two weeks of consecutive gains, the Indian market fell sharply on April 21, tracking global peers, after the US oil prices slipped below $0 a barrel in overnight trade.
Except for the pharma sector, all other sectoral indices ended lower led by the metal, IT, auto, banking and energy.
On the derivatives front, marginal put unwinding was seen at 9,000 strike which holds the maximum open interest while call writers added more than 9 lakh shares at 9,000 call strike.
It clearly shows that bulls are now feeling uncomfortable at the current levels to create fresh longs.
On the technical front, 8,800 levels would act as major support for Nifty below which we could see further long liquidation which could drag the index towards 8,600 levels in the coming sessions.
On the higher side, 9,200 would be the key resistance level.
Here are three stock recommendations for the next 3-4 weeks:
Laurus Labs | Buy | LTP: Rs 453 | Target price: Rs 540 | Stop loss: Rs 385 | Upside: 19%
The stock almost saw a V-shape recovery on the daily charts, after testing Rs 310 levels with prices once again reclaiming Rs 450 levels and holding well above its short and long-term moving averages.
At the current juncture, the stock has formed an inverted head and shoulder pattern and has also given breakout above the neckline of the pattern formation.
Additionally, the breakout has been witnessed with heavy volumes that suggest long build-up into the prices.
Traders can accumulate the stock on dips in the range of Rs 445-440 for the upside target of Rs 540 with a stop loss below Rs 385.
Bata India | Sell | LTP: Rs 1,196.70 | Target price: Rs 977 | Stop loss: Rs 1,250 | Downside: 18%
The stock has been maintaining its downtrend, slipping sharply ever since it breached its 200-days exponential moving average on the daily charts which was placed around Rs 1,600 levels.
In the recent past, after testing the lows of Rs 1,000, a technical bounce was witnessed towards Rs 1,300 and since then it has been consolidating in the range of Rs 1,300-1,150 from the last few weeks.
At the current juncture, the stock has formed a rounding top pattern and is still holding well below its short and long-term moving averages.
On the shorter timeframe as well, the stock is on the verge of a fresh breakdown below the neckline of the head and shoulder pattern.
So, traders can short sell the stock below Rs 1,150 levels for the downside target of Rs 977 with a stop loss above Rs 1,250.
Siemens | Sell | LTP: Rs 1,154 | Target price: Rs 1,000 | Stop loss: Rs 1,240 | Downside: 13%
After testing the lows of Rs 948 in late March 2020, the stock recovered decently towards Rs 1,200 levels with the formation of a higher bottom pattern on the daily charts.
However, this week, the recovery in the prices took a pause as it faced a hurdle at its 50-days exponential moving average which is placed around Rs 1,220.
The stock also breached its rising channel and fell below the escalating trendline of the channel.
So, traders can short sell the stock below Rs 1,150 for the downside target of Rs 1,000 with a stop loss above Rs 1,240.
(The author is Senior Technical Analyst at SMC Global Securities)
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