Vinay Rajani, Senior Technical & Derivative Analyst, HDFC Securities
It was a sell-off day in the Indian markets, where the Nifty witnessed a fall of 3 percent, while Bank Nifty plunged 4.2 percent. For the Nifty, it was the second biggest single day fall since April 2020.
After violating 50-day EMA (exponential moving average), the Nifty has now given a bearish breakout from the contracting triangle on the daily charts, which confirms the medium term downtrend. It has also violated the previous swing low of 16,836.
The next support for the Nifty is seen at 16,690 odd levels, which happens to be 200-day EMA.
The recent development indicates that the Nifty could test the previous swing low placed at 16,410. The support derived from the upward sloping trend line, adjoining the weekly lows of January 29, 2021 and April 23, 2021 also coincides with swing low of 16,410.
Here are three 'sell' calls for the next 2-3 weeks:
Amara Raja Batteries: Sell | LTP: Rs 577 | Stop-loss: Rs 600 | Target: Rs 525 | Return: 9 percent
The stock has registered fresh 52-week low with rising volumes. It has been forming lower tops and lower bottoms on the daily charts and has been underperforming the entire Auto sector.
It has breached double bottom support placed at Rs 585-odd levels. Indicators and oscillators have been showing downtrend on daily and weekly charts.
Deepak Nitrite: Sell | LTP: Rs 2,063 | Stop-loss: Rs 2,150 | Target: Rs 1,910 | Return: 7.4 percent
The stock has broken down from bearish Head and Shoulder pattern on the daily chart with jump in volumes. It found resistance on its 50-day EMA (exponential moving average) during pullback and resumed its downtrend afterwards.
The stock has confirmed the lower top and lower bottom formation on short term charts. Momentum indicators have given fresh sell signal on the daily charts, which opens the possibility of more downside in the counter form the current levels.
IDFC First Bank: Sell | LTP: Rs 43.8 | Stop-loss: Rs 45.5 | Target: Rs 40 | Return: 8.7 percent
The stock has broken down from the descending triangle on the daily charts. Bearish price breakout is accompanied with rise in volumes.
Indicators and Oscillators have turned bearish on daily and weekly charts. The stock has violated the crucial double bottom support of Rs 44.50 on closing basis.
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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