Last week, the Indian markets added nearly 3 percent but selling in the last couple of sessions pushed Nifty below 15,000. In all, it was a difficult week for momentum traders because the moment market tried to decide its direction, we had some surprises.
Although the market did manage to recover well from the previous Friday’s level, it us with some doubts.
As far as levels are concerned, 15,100 and 15,273 are immediate hurdles, whereas, on the lower side, 14,760 – 14,467 are the key supports.
If we take a glance at the weekly chart, we are still unsure whether the market has enough strength to go beyond recent highs around 15,400 – 15,550 without seeing any decent price or timewise correction.
But at the same time, they are just refusing to fall as well. It would be interesting to see how markets behave in the first half of this week. It should then ideally give us some fair idea of where it is heading in the short-term.
Traders are advised to focus on stock-specific moves and should avoid aggressive leveraged overnight positions.
Commodities have seen some decent correction and hence, it would be interesting to see how this theme plays out. The financial space is placed at a crucial level and any weakness from hereon would lead to a short-term breakdown.
Here are two sell calls for the next 2-3 weeks:
IndusInd Bank | LTP: Rs 1,039.90 | Target price: Rs 960 | Stop loss: Rs 1,085 | Downside: 8%
This stock has been one of the outperformers in the financial space for the last few months.
For a week or so, the stock has been struggling to surpass Rs 1,100 – 1,120 levels. A failure to go beyond these levels, despite several attempts, eventually resulted in decent profit-booking last Friday.
One day's fall in prices cannot be construed as a complete trend reversal but on the lower timeframe chart, we can see a range breakdown in prices.
Hindalco Industries | LTP: Rs 337.85 | Target price: Rs 319 | Stop loss: Rs 348 | Downside: 6%
Commodities across the globe have been enjoying a strong bull run for the past six months.
This week, we witnessed some healthy corrections in metal prices after a long time. This had a rub-off effect on the metal counters.
For Hindalco, this profit-booking precisely happened after reaching a key Fibonacci ratio of 161 percent (golden ratio) placed around Rs 350.
On the daily chart, we can see prices closing convincingly below 5-day EMA along with a bearish crossover in the RSI-smoothened oscillator.
Also, due to last week’s late correction, the weekly chart depicts a shooting star pattern which does not bode well for the bulls.
(The author is Chief Technical & Derivatives Analyst at Angel Broking)
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